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SR-8-E (14) J-L CA:RMM:rmdl162/hpca City ~ouncil Meeting 8-7-90 AUG 7 1990 Santa Monica, California STAFF REPORT TO: Mayor and city council FROM: city Attorney SUBJECT: Ordinance Approving the Development Agreement between the Pacific Beach Development Limited Partnership and the City of Santa Monica At its meeting on August 1, 1990, the city Council introduced for first reading an ordinance approving the Development Agreement between Pacific Beach Development Limited Partnership and the City of Santa Monica. The ordinance is now presented to the city Council for adoption. RECOMMENDATION It is respectfully recommended that the accompanying ordinance be adopted. PREPARED BY: Robert M. Myers, city Attorney Mary H. Strobel, Deputy city Attorney J-F AUG ,'1990 ......- --- ~~ -. --....... DEVELOPMENT AGREEMENT between PACIFIC BEACH DEVELOPMENT LIMITED PARTNERSHIP, a California limited par~nership and CITY OF SANTA MONICA, a municipal corporation - iv - TABLE OF CONTENTS 1. Definitions. . 2. Description of Property 3. Descrintion of Project . . 3(a) 3(b) 3(C) 3(d) 3(e) 3(f) 3(g) 4. Parking primary Components of Project . Maximum Floor Area . . . . . . . . Building Height . . .. .... Maximum Parcel Coverage Minimum Setbacks . . . . . . . . . Access and Circulation Landscaping . . . . . . . . 4(a) Total Parking Spaces Required . . . . . . 4(b) Hotel Spaces . . . . . . . . . . . . . . . . . . 4(c) Pub 1 ic Spaces . . . . . . . . . . . . . . . . . . 4(d) Compact, Tandem and Handicap Spaces . . . . . . . 4(e) Minimum Dimensions . . . . . . . . . . . . . . . 6 22 22 22 23 26 28 28 31 31 32 32 33 35 37 37 38 5(a) Permitted Uses . . . . . . . . . . . . . .. 38 5(b) Sale and Consumption of Alcoholic Beverages. 39 6. pro;ect Mitigation Measures Parks and Recreation Fee 8. . . . . . . . . . . . . . Art . . . . . . . . . . . . Mitigation Measures . . . . . . . . . . No Additional Mitigations . . . . . State Law . . . . . . . . . . . General Services Requirements 8(a) Compliance with Requirements . . . . . . 8(b) Public Sewer Capacity Allocation . . . . 9. Changes to pro;ect . . . . . 9(a) Floor Area Changes . . . . . . . . . . . . . 9(b) Subterranean Changes . . . . . . . . . . 9(c) Acceleration Lane . . . . . . . 9(d) ARB and Landmarks Commission Changes . . . . 9(e) Major Changes . . . . . . . . . . . . . . . . . . - i - 43 43 44 47 47 47 7. Non-Discrimination, Affirmative Action and Job Training 48 5. Uses 6(a) 6(b) 6(c) 6(d) 6(e) 49 49 49 51 51 56 58 58 59 11. 10. Rent Control Board Aoorovals . . . . . . . . . 12. 13. 14. Assiqnment; Binding Effect . Effect of Aqreement on Land Use Requlations 12(a) 12(b) 12 (c) 12 (d) 12(e) Application of Existing Regulations Transportation Management Program Fee Processing and Permit Fees . . . . Inconsistent Code provisions . Architectural Review Board . . certificates of Occupancy Permits and Approvals 14(a) 14 (b) 14 (c) 15. Issuance of Necessary Permits and Approvals City Approvals and Permits . . . . . . . . . Landmarks Commission Review . . . ... Proprietary Capacity . . . . . . . . 16. Periodic Review of Compliance with Aqreement 16(a) 16(b) 16(c) 16(d) City Review . . . . . Required Findings Evidence of Good Faith Public Hearing . . . . . . . . Compliance 17. Enforcement 18. Validity of Aqreement 19. Default . . . . . . . . . . . . . . . . + - 19(a) 19(b) Developer Defaults . . . . city Defaults . . . . 20. Procedure Upon Default . . . . . . . . . . 20(a) Termination by city . . . . . . . . . . . . 20(b) Termination by Developer . . . . . . . . . . 20(c) Remedies Cumulative . . . . . . . . . . . . 20(d) Cessation of Rights and Obligations 20(e) Survival of Obligations . . . . . . . . 21. Notice of Termination 22. Leasehold Mortqaqee's Riqht to Cure 23. 24. 25. Duration of Aqreement Supersedure by Subsequent Laws . Estoppel certificate . . . . - ii - 59 60 60 60 62 62 63 63 64 64 64 65 66 67 67 67 67 68 68 69 70 70 70 71 72 72 72 72 73 73 73 74 76 77 77 26. Recordinq of Aqreement . . . . . . . . . .. 78 27. Notices . . . ... . . . . . .. 78 28. Entire Agreement. . . . . . . . . . . . . 80 29. No Oral Modification. . . . . . . . . .. 80 30. Table of Contents and section Headinos . ... 80 31. severability; Invalidity of Particular provisions 81 32. No Partnership or Joint Venture . . . . . .. 81 33. Attorneys' Fees . . . . . . . . . . . . .. 81 34. Exhibits. . . . . . . . . . . . . ... 82 35. Construction.. . . . . . . . . . 82 36. Governinq Law . . . . . . . . . . . .. ..' 82 37 . Counterparts...... . . . . . . . . ... 82 38. Bindino Effect. . . . . . . . . . . . . . 82 39. Aoreement to Cooperate. . . . . . . . . . . . . . 83 40. state Mandated Revisions . . . . . . . . .. 83 41. No Third Party Beneficiary . . . . . . . .. 83 42. Limitation on Developer's Riqht of Enforcement 84 43. Revenue Tarqetinq . .. .... . . . .. 84 4. Transient Occupancy Tax . . . . . . . . . . . .. 84 EXHIBITS Exhibit "A" - Legal Description of the Property Exhibit "B" - Project Plans Exhibit "e" - Mitigation Measures Exhibit 110" - Requirements of the General Services Department - iii - DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT ("Agreement") is entered into this 6th day of September, 1990, between the PACIFIC BEACH DEVELOPMENT LIMITED PARTNERSHIP, a California limited partnership ("Developer"), in which Pacific Beach Development corporation, a California corporation, is its sole general partner, and the CITY OF SANTA MONICA, a municipal corporation organized and existing pursuant to the laws of the State of California and the Charter of the City of Santa Monica ("city"), with reference to the following facts: R E C I TAL s: A. Pursuant to California Government Code section 65864 et seq. and Santa Monica Municipal Code section 9800 et seq., the city is authorized to enter into binding development agreements with persons having legal or equitable interests in real property for the development of such property. B. The state of California ("state") is the legal owner of certain real property ("Propertyll) consisting of approximately 213,755 square feet of land which is located in the City of Santa Monica, state of California, as more particularly described in Exhibit "All attached hereto and incorporated herein by this reference. The Property, which constitutes a portion of the Santa Monica State Beach which is designated as a state Recreation Unit pursuant to California Public Resources Code Section 5019.56, is operated by the City on behalf of the State pursuant to a written operating agreement (lIstate operating Agreement") between the city and the California Department of Parks and Recreation dated September 1, 1981. C. On March 31, 1987, the City issued for public response a Request for Proposals ("RFP") to select a long-term developer/ lessee for the Property. The RFP contemplated redevelopment of the Property for visitor-serving uses including, without limitation, overnight visitor accommodations, restaurant and beach recreational uses. The City prepared the RFP in consultation with the city's Recreation and Parks Commission, the California Department of Parks and Recreation and the state Lands Commission. Prior to its issuance, the RFP was approved by the Santa Monica city Council, the California Parks and Recreation Commission and the California Department of Parks and Recreation. D. On June 14, 1988, the City selected the Developer for the purpose of entering into exclusive negotiations for development of the Property pursuant to the RFP. E. On November 14, 1988, the City and the Developer signed an Exclusive Negotiating Agreement governing negotiations between the city and the Developer for development of the Property. F. Pursuant to the Disposition and Development Agreement ("DDAU) of even date herewith, between the City and the Developer, the city has agreed to ground lease the Property to Developer upon and subject to the terms and conditions described in the DDA, this - 2 - Agreement and the form of ground lease attached as an exhibit to the DDA. G. On May 2, 1989, the Developer filed with the city an Application for Development Agreement ("Development Applicationll), which was "deemed sUbstantially complete" by the city on the same date. H. The Developer has paid all necessary costs and fees associated with the City's processing of the Development Application and this Agreement. I. The City has complied with all procedures required by Government Code Section 65864 et seq. and Santa Monica Municipal Code section 9800 et seq. regarding the processing of the Development Application and this Agreement, including the following: I(l) The Planning Commission held a duly-noticed public hearing on the Development Application and this Agreement on May 16 and May 23, 1990 and made its written recommendation to the city Council in accordance with Santa Monica Municipal Code Section 9812; and I(2) The city council held a dUly-noticed public hearing on the Development Application and this Agreement on July 17 and 31, 1990. Following completion of the public hearing and consideration of the recommendation of the Planning Commission, the - 3 - city council adopted an ordinance on August 7, 1990 ("Adoption Date"): I(2) (a) this Agreement; approving the Development Application and I(2) (b) finding that this Agreement is consistent with the city's General Plan; I(2) (c) authorizing the city Manager to execute this Agreement; and 1(2) (d) certifying the final Environmental Impact Report ("EIRII) for the Project. J. The final EIR certified by the city council analyzes in detail the significant environmental effects of all aspects of the proposed development of the Property. In certifying the final EIR: J(l) The city Council determined that the final EIR has been prepared in compliance with the California Environmental Quality Act (Public Resources Code section 21000 et seq.) ["CEQA"], the state CEQA Guidelines, and the City Guidelines for Implementation of CEQA, adopted by City Council Resolution No. 6694(CCS) on May 24, 1983. J(2) The City Council reviewed and considered the information contained in the final EIR prior to certifying the EIR, - 4 - and prior to approving the Development Application and this Agreement. K. The proposed development of the Property (" proj ect II ) involves three (3) primary components: a beach hotel and hotel- related uses, a community center to serve the general public, and a subterranean parking facility to serve users of both the hotel and the community center. L. The city council has determined that a development agreement is appropriate for the proposed development of the Property. This Agreement shall eliminate uncertainty in planning for, and secure orderly development of, the Project, assure installation of necessary improvements, provide for public services appropriate to development of the Project, ensure attainment of the maximum effective utilization of resources within the City at the least economic cost to its citizens and otherwise achieve the goals and purposes for which Government Code Section 65864 et seq. and Santa Monica Municipal Code Section 9800 et sea. were enacted. M. By entering into this Agreement, the City acknowledges that it shall receive substantial benefits conferred as a result of development of the Property in accordance with the terms, condi- tions and obligations of this Agreement, the Ground Lease, the DDA and the Community Center Operating Agreement (as hereinafter defined) . In exchange for these benefits to the City, the Developer desires to receive the assurance that it may proceed with the Project in accordance with existing ordinances, resolutions and - 5 - regulations applicable to such developments, subject to the terms and conditions contained in this Agreement. N. City and Developer mutually acknowledge that Developer would not agree to expend the considerable amounts of time, effort and money needed to construct the Project or to confer the substantial benefits to the city under the terms, conditions and obligations of this Agreement, the Ground Lease, the DDA and the Community Center Operating Agreement without the assurances the City provides to the Developer in this Agreement that the Developer will be able to complete and operate the Project pursuant to the Existing Regulations (as hereinafter defined). NOW THEREFORE, in consideration for the covenants and conditions hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: 1. Definitions. For purposes of this Agreement, the following terms and phrases shall be interpreted as hereinafter defined, unless the context clearly indicates a contrary intent of the parties: Adoption Date: The date listed in Recital section I(2) of this Agreement. - 6 - Aqreement: This Development Agreement entered into between the city and the Developer. Al ternati ve Subterranean Plans: Section 9(b) herein. As defined in Art Appraiser: L.A. Louvre Gallery, or should L.A. Louvre Gallery cease to do business, another qualified art appraiser mutually acceptable to the City and the Developer. Art Elements: certain architectural elements of the Project which are designed by recognized artists commissioned by the Developer. The Art Elements may include, without limitation, the equipment in the Children I S Play Area, the Hotel Pool, and miscellaneous Project elements such as doors, walls, panels and cabinets. Art and Environment Center: The portion of the Community Center which comprises the Arts and Cultural Center and the Marine Learning Center. At-Grade Footprint: The at-grade perimeter outline of a building based upon the perpendicular projection to the ground of all portions of that building. Arts and Cultural Center: The interior area located wi thin the Community Center in which arts-related programs and instruction are conducted. The Arts and Cultural Center shall - 7 - include, without limitation, studio and classroom areas, lecture facilities and related office space. Averaqe PCH Elevation: The average elevation of Pacific Coast Highway between the northern and southern Property Lines measured at the center line of Pacific coast Highway. Banquet Facilities: The ballroom and banquet facilities, other than the Hotel Meeting Rooms and the Multi-Purpose Room, which are located in the Hotel, including all related pre-function rooms and ancillary areas. Beach Cafe: A restaurant, as defined in the Zoning Ordinance in effect on the Adoption Date, which is located in the Community Center. The Beach Cafe shall include dining areas (which may provide both interior and exterior seating) and related kitchen and restroom facilities. Beach Fund: The fund established by the City for the deposit of all revenues received by the City from its operations, concessions and leases of Santa Monica state Beach pursuant to the state Operating Agreement. Beach Parking Spaces: As defined in section 4(c) (i) (A) herein. - 8 - Beach Rental Kiosk: The temporary kiosk located on the Property which will provide beach-related merchandise for sale and rent. Buildino Heiqht: The vertical distance of each building measured from the Average PCH Elevation to the highest point of the roof. Measurement of Building Height shall not include those physical features set forth in Section 3(c). Certificate of Occupancy: A temporary or final certificate of occupancy which is required to be issued by the city as a condition precedent to the occupancy of a building in the Project. Children's Play Area: A portion of the exterior area of the Community Center, which is equipped by Developer with outside playground equipment for use by the general public. The playground equipment and its location within the Children's Play Area shall be selected by Developer and submi tted to the city Manager for approval, which approval shall not be unreasonably withheld or delayed. The Children's Play Area is designated on Drawing 1 of the Project Plans. City: The City of Santa Monica, a municipal corporation, organized and conducting business pursuant to the laws of the state of California and the Charter of the City of Santa Monica. - 9 - City Art: As defined in section 6(b) (i) herein. city Council: The city council of the City of Santa Monica. City Default: As defined in Section 19(b) herein. city Manaqer: The City Manager of the City of Santa Monica. Community Center: As defined in Section 3(a) herein. Community Center Operating Aqreement: The Community Center Operating Agreement between the City and the Developer, a copy of which is attached as an exhibit to the Ground Lease. Community Center Parkinq Spaces: As defined in section 4(c) (i) (B) herein. Community Room: The meeting and function room which is located in the Community Center and which is available for use and rental by public and private groups and individuals pursuant to rules and regulations established by Developer in accordance with the Community Center Operating Agreement. The community Room includes both interior space and an exterior deck. CUP: As defined in section 5(b) (i) herein. - 10 - DDA: That certain Disposition and Development Agreement between City and Developer, pertaining to the development of the Property. Default Notice: As defined in section 22(b) herein. Desiqnated Area: The area of the Property established for the Hotel and the Community Center within which the respective At-Grade Footprints of the Hotel and Community Center must be fully situated, as shown by the shaded areas on Drawing 1C of the Project Plans. Developer: Pacific Beach Development Limited Partnership, a California limited partnership, in which Pacific Beach Development Corporation, a California corporation, is the general partner, and any and all successors and assigns as authorized or approved under the DDA and the Ground Lease. Developer Art: As defined in section 6(b) (ii) herein. Developer Default: As defined in section 19(a) herein. Development Application: As defined in Recital G of this Agreement. - 11 - District: The R4 High Density MUlti-family Residential District, as defined in the zoning Ordinance in effect on the Adoption Date. Environmental Impact Report or EIR: Recital Section 1(2) (d) of this Agreement. As defined in ExistinCf Regulations: The General Plan (including, without limitation, the LUCE) and any and all codes, ordinances, rules, regulations, standards, specifications and official policies of the city governing or affecting development, density, height, permitted uses, intensity of uses and improvements which are in force and effect and applicable to the Project as of the Adoption Date of this Agreement. Failure to Cure Notice: As defined in section 22 (c) herein. Floor Area: The total gross horizontal areas of all floors of a building below the roof and measured from the interior face of exterior walls, or a wall separating two abutting buildings. (i) Floor Area shall specifically include, without limitation, the following areas occupied by: (i) (A) useable basements and cellars; - 12 - (i) (B) restrooms, kitchens, storage areas, and corridors; lounges, lobbies, interior hallways and (i) (C) interior courtyards, atria, paseos, walkways and corridors covered by a roof or skylight; (i) (D) at-grade parking covered by a building, structure or roof; and (i) (E) above grade parking. (ii) Floor Area shall specifically exclude the following: (ii) (A) stairways and stairwells; (ii) (B) elevators, elevator equipment rooms; elevator shafts and (ii) (C) ramps to a subterranean or semi- subterranean parking facility or ramps between floors of a subterranean or semi-subterranean parking facility, provided that the ramp is not utilized for the parking of vehicles. (ii) (D) unenclosed decks, balconies, and platforms which are not used for commercial or restaurant - 13 - activity, whether or not covered by a roof, including, without limitation, the deck for the Hotel Pool, the deck adjacent to the Community Room and the balconies outside the Guest Rooms; (ii) (E) exterior courtyards, arcades, atria, paseos, walkways, and corridors which are not used for commercial or restaurant activity, whether or not covered by a roof; (ii) (F) the volume above interior courtyards, atria, paseos, walkways, and corridors, whether or not covered by a building structure or roof; (ii) (G) Subterranean Parking Facility devoted exclusively for parking, uses associated with that parking, and loading and unloading; (ii) (H) at-grade parking not covered by a building, structure or roof: (ii)(I) loading docks covered by a roof or canopy, but otherwise open or unenclosed and used primarily for loading and unloading; and - 14 - (ii)(J) mechanical equipment rooms, electrical rooms, telephone rooms and similar space located below grade. Floor Area Chanqes: As defined in section 9(a) herein. General Fund: The General Fund of the city's annual budget. General Plan: The comprehensive, long-term General Plan for the physical development of the city of Santa Monica adopted pursuant to California Government Code section 65300 et seq. and Santa Monica Municipal Code section 9400 et seq. including all elements of the General Plan. Ground Lease: The written Concession Agreement and Ground Lease of the Property between the City, as Landlord, and the Developer, as Tenant. Guest Room: Each unit which is designed for, or occupied as, temporary lodging for individuals for a period of less than thirty (30) consecutive days and which is separately available for rental to guests of the Hotel. Hotel: As defined in section 3(a) herein. Hotel Meeting Rooms: The conference facilities and meeting rooms, other than the Banquet Facilities and the Multi- - 15 - Purpose Room, located in the Hotel, including all related pre- function rooms and ancillary areas. Hotel Parking Spaces: As defined in Section 4 (b) (i) herein. Hotel Pool: The exterior swimming pool and the two (2) exterior rinse pools located on the Property which are for the use of the patrons of the Hotel, pursuant to reasonable rules and regulations established by the Developer. Hotel Restaurant: A restaurant (as defined in the Zoning Ordinance in effect on the Adoption Date) which is located in the Hotel. The Hotel Restaurant shall include dining areas, (which may provide both interior and exterior seating) a bar and bar lounge, and related kitchen facilities. Hotel Spa: The health, beauty and fitness center which is located in the Hotel, which may include, without limitation, a beauty salon, a barber shop, separate locker facilities for men and women, a massage area, sauna, steam room, indoor jacuzzi, exercise area and weight room. Law: As defined in Section 24 herein. Leasehold Mortgage: Any mortgage, deed of trust, pledge, encumbrance or other security interest encumbering all or any part - 16 - of Developer's leasehold estate in the property which is permitted under the Ground Lease. Leasehold Mortaaqee: A holder of a Leasehold Mortgage. Leasehold Mortqaqee Notice: As defined in Section 22(b) herein. Liquor License Approvals: 5(b) (iii) herein. As defined in section LUCE: General Plan. The Land Use and Circulation Elements of the Marine Learninq Center: The interior area located within the Community Center in which environmental programs and instruction are conducted, which shall include, without limitation, studio and classroom areas, and related office space. Mature Trees: As defined in section 3(g) herein. MUlti-Purpose Room: The interior room which may be located in the Hotel, as designated on the Project Plans. Non-Peak Activity period: The period of time of each calendar year, excluding the time between Memorial Day and Labor Day, inclusive. - 17 - Non-Reserved Hotel parkina Soaces: As defined in Section 4(b) (i) herein. North House: The house which is part of the former Marion Davies estate located on a portion of the Property as of the Adoption Date. Pacific Coast Hiqhway: The public highway also known as California Route 1 which runs adjacent to the eastern Property Line. Peak Activity Period: The period of time of each calendar year from Memorial Day to Labor Day, inclusive. Planning Commission: The Planning Commission of the City of Santa Monica. Plantinq Areas: As defined in section 3(g) herein. Plinth: The base block to be constructed on the Property upon which the North House will be relocated. Project: The proposed development of the Property as is more particularly described in section 3 of this Agreement and in the Project Plans. - 18 - Project Plans: Those certain Project Plans dated February 13, 1990, April 30, 1990 and June 15, 1990, prepared by Skidmore, Owings & Merrill (as the same may be amended from time to time in accordance with the terms of this Agreement, the DDA and the Ground Lease) which are attached hereto as Exhibit IIBII and which set forth the basic guidelines and scope for the development of the Project. Property: As defined in Section 2 herein. Property Lines: As delineated and labeled on Drawing 1 of the Project Plans. Public Beach Facility: A public changing and shower facility which is located in the Community Center and which includes: (i) a room containing approximately 250 baskets for men and approximately 250 baskets for women for daily storage of clothing and other personal items, (ii) separate shower and toilet facilities for men and women, providing six (6) showerheads, three (3) toilets and two (2) urinals in the men's facility and six (6) showerheads and five (5) toilets in the women's facility, and (iii) separate changing or dressing areas for men and women. Public Parkinq Spaces. As defined in section 4(c)(i) herein. Reserved Hotel Parkinq Spaces: 4(b) (i) herein. As defined in section - 19 - Reserved Line: As delineated and labeled on Drawing 1 of the Project Plans. Reserved Portion: That portion of the Property which is located between the Reserved Line and the western Property line of the Property. The Reserved Portion is depicted as the shaded area on Drawing Ie of the Project Plans. RFP: As defined in Recital C of this Agreement. Santa Monica Bay Restoration Project: A joint federal/state program created under the auspices of the National Estuary Program of the federal Environmental Protection Agency, whose purpose is to devise programs for cleaning Santa Monica Bay and for improving the water quality and ecology of Santa Monica Bay. Santa Monica state Beach: All land which is the subject of the State Operating Agreement between the city and the California Department of Parks and Recreation. School District: The Santa Monica-Malibu Unified School District. Sculpture Garden: The exterior area located between the Hotel and the Community Center on the Property in which sculpture and other Works of Art are displayed for viewing by the general - 20 - public. The Sculpture Garden is designated on Drawing 1 of the Project Plans. state: The state of California. state Operating Agreement: As defined in Recital B of this Agreement. Subsequent Code Changes: As defined in Section 12(a) herein. Subterranean Section 3(a) herein. Parking Facility: As defined in Tandem Parking: A group of two or more parking spaces arranged one behind the other where one space blocks access to the other space. TMP Ordinance: As defined in Section 12(b) herein. Works of Art: Lithographs, paintings, etchings, sculptures and similar types of art. Zoning Administrator: The Director of Planning of the City of Santa Monica. Zoning Ordinance: The city of Santa Monica Comprehensive Land Use and Zoning Ordinance (Santa Monica Municipal Code Section - 21 - ~ ATTACHMENTS: 1. Planning Commission staff Report (May 23, 1990) 2. Development Agreement 3. Concession Agreement and Ground Lease 4. Disposition and Development Agreement 5. Tri-Party Agreement 6. Planning Commission Information Item (May 30, 1990) 7. Resolution Certifying Final Environmental Impact Report with Statement of overriding Considerations 8. Ordinance Adopting the Development Agreement 9. Resolution Authorizing the Negotiation and Execution of the Concession Agreement and Ground Lease 10. Resolution Authorizing the Negotiation and Execution of the Disposition and Development Agreement 11. Resolution Approving the Tri-Party Agreement 12. Mitigation Monitoring Plan w/sstb1 Footprint of the Hotel shall be entirely situated within the Designated Area for the Hotel as shown on Drawing 1C of the Project Plans. 3(a) (ii) Community Center. The Community Center shall include the Beach Cafe, Public Beach Facility, the Art and Environment Center, the community Room, the Children's Play Area and the Sculpture Garden. The community Center shall include the North House which shall be relocated from its existing location on the Property to be part of the Community Center in accordance with the Project Plans. The At-Grade Footprint of the Community Center shall be entirely situated within the Designated Area for the Community Center as shown on Drawing 1C of the Project Plans. 3 (a) (iii) Subterranean Parkinq Facility. The total of all subterranean areas of the Project designed or devoted principally for parking and uses associated with such parking, as shown on Drawings 6 and 7 of the Project Plans. 3(b) Maximum Floor Area. The total Floor Area of the Project shall not exceed 209,684 square feet. The maximum Floor Area of the Hotel and the Community Center shall be as follows: 3(b) (i) Hotel. The Floor Area of the Hotel shall not exceed 193,601 square feet. The maximum Floor Area of certain component uses within the Hotel which are listed below shall be as follows: - 23 - 3(b) (i) (A) Hotel Restaurant. The Floor Area of the Hotel Restaurant shall not exceed an aggregate of 5,800 square feet, within which the Floor Area for the interior dining room shall not exceed 2,030 square feet, the Floor Area for the outdoor dining area shall not exceed 1,500 square feet, the Floor Area for the kitchen shall not exceed 1,430 square feet and the Floor Area for the bar and bar lounge shall not exceed 840 square feet. The Hotel Restaurant shall contain no more than 200 seats for interior and outdoor dining and 25 seats at the bar and lounge area. The Hotel Restaurant shall not be open for new seating on weekdays from 3:30 p.m. to 6:30 p.m.: provided, however, the bar and bar lounge in the Hotel Restaurant may be open for new seating on weekdays from 3:30 p.m. to 6:30 p.m. 3 (b) (i) (B) Hotel Meetinq Rooms. The Floor Area of the Hotel Meeting Rooms shall not exceed an aggregate of 4,428 square feet. 3 (b) (i) (C) Multi-Purpose Room. The Floor Area of the Multi-Purpose Room shall not exceed 2,001 square feet. 3 (b) (i) (D) Banquet Facilities. The Floor Area of the Banquet Facilities shall not exceed 7,572 square feet. - 24 - 3(b) (ii) community Center. The Floor Area of the Community Center shall be 16,083 square feet (plus or minus 10 square feet). The Floor Area of certain component uses wi thin the Community Center which are listed below shall be as follows: 3 (b) (ii) (A) Beach Cafe. The Floor Area of the Beach Cafe shall be an aggregate of 2,747 square feet (plus or minus 10 square feet), within which the Floor Area for interior dining shall be 1,417 square feet (plus or minus 10 square feet), the Floor Area for outdoor dining shall be 1,667 square feet (plus or minus 10 square feet), the Floor Area for the kitchen shall be 349 square feet (plus or minus 10 square feet) and the Floor Area for the restrooms shall be 84 square feet (plus or minus 10 square feet). The Beach Cafe shall contain no less than 190 seats nor more than 200 seats for interior and outdoor dining. 3(b) (ii) (B) Public Beach Facility. The Floor Area of the Public Beach Facility shall be 2330 square feet (plus or minus 10 square feet). 3 (b) (ii) (C) community Room. The Floor Area of the Community Room shall be 815 square feet (plus or minus 10 square feet). There will additionally be an exterior covered terrace area which shall be 250 square feet (plus or minus 10 square feet) and an uncovered - 25 - terrace area of 825 square feet (plus or minus 10 square feet) which shall be adjacent to, and a part of, the Community Room. 3(b) (ii) (D) Art and Environment Center. The Floor Area of the Art and Environment Center shall be an aggregate of 6,197 square feet (plus or minus 10 square feet). Within the Art and Environment Center, the Floor Area of the Arts and Cultural Center shall be 3,525 square feet (plus or minus 10 square feet) and the Floor Area of the Marine Learning Center shall be 2,672 square feet (plus or minus 10 square feet). 3(c) Buildinq Heiqht. No building or structure in the Project shall exceed four (4) stories nor have a vertical height which extends more than thirty-five (35) feet above the Average peR Elevation. The following shall be permitted to exceed the Building Height: 3(c) (i) Chimneys, vents, stacks, ducts, skylights and steeples, provided such features do not extend more than five (5) feet above the Building Height. 3(c) (ii) Parapets, fire separation walls and open work safety guard rails, provided they do not exceed forty-two (42) inches in height. - 26 - 3 (c) (iii) Elevator shafts, stairwells, or mechanical room enclosures above the Building Height provided: 3 (c) (iii) (A) The enclosure is used exclusively for housing the elevator, mechanical equipment, or stairs. 3(c) (iii) (B) The elevator shaft does not exceed fourteen (14) feet above the Building Height. 3(c) (iii) (C) The stairwell enclosure does not exceed ten (10) feet above the Building Height. 3(c) (iii) (D) The area of all enclosures and fixtures identified in 3(c)(iii) (A), 3(c) (iii) (B), and 3(c) (iii) (C) that extend above the Building Height shall not exceed twenty-five percent (25%) of the roof area. 3 (c) (i v) The screening required pursuant to Section 9040.14 of the Santa Monica Zoning Ordinance, in effect as of the Adoption Date, of tanks, ventilating fans, or other mechanical equipment required to operate and maintain any building in the Project, provided that the total area enclosed by all screening does not exceed thirty percent (30%) of the roof area, and provided the screening does not extend more than ten (10) feet above the Building Height. - 27 - 3 (d) Maximum Parcel Coverage. The aggregate square footage of the At-Grade Footprints of the Hotel and Community Center shall not exceed 30% of the total square footage of the Property. 3 (e) Minimum Setbacks. Except for walls and fences delineating the Property Lines, the Project shall comply with the following minimum setbacks: 3 (e) (i) The elevator overrun for the Community Center shall not be less than two (2) feet from the northern Property Line of the Property and not more than two (2) feet above the height of the Plinth. The Plinth shall not be less than four (4) feet from the northern Property Line of the Property. Except for the Plinth and said elevator overrun, no other above-grade building or portion thereof shall be less than twelve (12) feet from the northern Property Line of the Property. No below grade facility or any portion thereof, including without limitation the Subterranean Parking Facility, shall be less than zero feet from the northern Property Line of the Property. 3(e) (ii) No building or portion thereof shall be less than eleven (11) feet from the southern Property Line of the Property. 3 (e) (iii) No above grade building or portion thereof shall be less than fifteen (15) feet from the eastern - 28 - Property Line of the Property. No below grade facility or any portion thereof including, without limitation, the Subterranean Parking Facility shall be less than zero feet from the eastern Property Line of the Property. 3(e) (iv) The minimum set backs from the western Property line of the Property shall be as follows: 3 (e) (iv) (A) No above-grade building or portion thereof [ other than an improvement permitted in the Reserved Portion pursuant to section 3(e) (iv) (C)J shall be less than zero feet from the Reserved Line. 3 (e) (iv) (B) Except as provided in Section 8(b), no below grade facility or any portion thereof, including without limitation the Subterranean Parking Facility shall be less than zero feet from the western Property line of the Property. 3(e) (iv) (C) The Developer may construct, install and erect only the following above-grade improvements in the Reserved Portion all as more specifically depicted on Drawing 1 of the project Plans: walks, landscaping, the Hotel Pool and the adjacent deck area (if not covered by a roof), the exterior dining terrace for the Hotel Restaurant (if not covered by a roof), the Sculpture Garden, the Children's Play Area, - 29 - the exterior dining terrace for the Beach Cafe (if not covered by a roof), the Beach Rental Kiosk, a new bikepath connection providing access to and from the Hotel and Community Center to the public beach bikepath and public sidewalks, a ramp to provide access for handicapped persons from the Proj ect to the beach of approximately 440 feet in length (which ramp may extend west of the Western Property line of the Property), a walkway providing access to and from the Community Center to the public beach and landscaped areas of the Hotel, a bicycle rack, an exterior shower with two showerheads, a drinking fountain, a transparent perimeter fence which will not exceed four (4) feet six (6) inches above the sand, garden walls not to exceed three (3) feet in height, and portions of stairs providing access to and from the Subterranean Parking Facility (if not covered by a roof). No portion of such improvements shall be less than zero feet from the western Property line of the Property. 3(e) (iv) (D) Except for the above-grade improvements specifically listed in section 3(e) (iv) (C), Developer shall not construct, install or erect any permanent above-grade building or portion thereof in the Reserved Portion, including, but not limited to, the Subterranean Parking Facility. - 30 - 3(f) Access and Circulation. Points of vehicular and pedestrian ingress and egress to and from the interior of the Project and Pacific Coast Highway and the vehicular and pedestrian circulation system within the Project shall be substantially in accordance with the Project Plans. Developer shall install and maintain a five (5) foot sidewalk on the Property adjacent to Pacific Coast Highway. 3(g) Landscaping. The Project shall be fully landscaped in a manner which shall be substantially in accordance with the Landscape Plan which is included as part of the Project Plans and in conformance with the ErR mitigation requirements related to landscaping which are enumerated on Exhibit "CII to this Agreement. Landscaping for the Project shall include, without limitation, the use of Mature Trees and other landscaping in open space areas within the Project and on the perimeter of the Property. For the purposes of this Section 3(g), "Mature Trees" shall mean: (i) for palm trees, trees with between 15 feet and 22 feet of brown trunk and (ii) for all other trees, trees with a box size of not less than 36 inches. Landscaping for the Project shall specifically include: (i) a planting area of ten (10) feet in width along the eastern Property Line of the Property featuring a planting depth of approximately five (5) feet, and (ii) a planting area of four (4) feet in width along the northern Property Line of the Property on either side of the elevator overrun for the Community Center featuring a planting depth of approximately five (5) feet (collectively, the IIPlanting Areasl1). The Planting Areas are shown on Drawing 1B of the Project Plans. The Planting Areas shall be - 31 - used for the planting of Mature Trees in compliance with the standards set forth in Subchapter 5B of the zoning Ordinance in effect on the Adoption Date. The City agrees that the Planting Areas constitute satisfactory compliance with: (i) the mitigation measures in the EIR for "Land Uself set forth on Exhibit C to this Agreement and (ii) the requirements of Santa Monica Municipal Code section 9040.17. The city further agrees that compliance with the requirements of this Section 3(g) shall supersede any obligations otherwise imposed by Section 9040.17, or any successor or similar provision, as it pertains to the Property. 3 (h) Beach Improvements. Subject to approval of the California Coastal Commission, and any other applicable State agency or department, the Developer shall install a temporary volleyball net and a ramp to provide access for handicapped persons from the Project to the beach on the portion of the santa Monica state Beach located west of the western Property line of the Property. The specific location of such improvements shall additionally be subject to approval of the city, which shall not be unreasonably withheld or delayed. 4. Parking. Parking for the Project shall meet the following conditions, which conditions the City acknowledges and agrees are in compliance with the mitigation measures in the EIR for If Traffic and Parking It set forth on Exhibit C to this Agreement: 4(a) Total Parking Spaces Required. Except as provided in Section 9(b) (vi) (A), the Project shall provide a minimum of five - 32 - hundred and twenty eight (528) total parking spaces in the Subterranean Parking Facility, including standard and compact spaces and spaces for Tandem Parking. No permanent at-grade or above-grade parking shall be provided on the Property except for a maximum of thirteen (13) at-grade parking spaces reserved for guests checking into the Hotel and passenger drop-off and pick-up for persons utilizing the Hotel and the Community Center. 4(b) Hotel Spaces. 4 (b) (i) A minimum of two hundred fifty (250) parking spaces at the Project shall be for the use of guests and employees of the Hotel ( "Hotel parking Spaces ") . One hundred fifty (150) of the Hotel Parking Spaces shall be reserved at all times for the use of guests and employees of, and visitors to, the Hotel ("Reserved Hotel Parking Spaces") . Up to one hundred (100) of the Hotel Parking Spaces may be utilized by visitors to Santa Monica State Beach ("Non- Reserved Hotel Parking Spaces") as more particularly set forth below in section 4 (b) (ii) . Except as provided in Section 4 (b) (ii), all of the Non-Reserved Parking Spaces shall be available only for the use of guests and employees of, and visitors to, the Hotel. In those portions of the Subterranean parking Facility utilized by the Developer for Hotel parking, the Developer may horizontally stack automobiles in aisles of the Subterranean Parking Facility, provided that an attendant parks and moves all vehicles in such portion of the - 33 - subterranean parking Facility during all hours in which stacked parking is utilized. 4 (b) (ii) Except as provided in section 9 (b) (vi) (B) , during the hours of 7:30 a.m. to 4:00 p.m. on weekend days during the Peak Activity Period and on Memorial Day, Fourth of July and Labor Day I the Non-Reserved Hotel Parking Spaces shall be available to visitors of the Santa Monica state Beach pursuant to the provisions of Sections 4(b) (ii) (A) and (B) below. 4 (b) (ii) (A) The Non-Reserved Hotel Parking Spaces shall be available to visitors to Santa Monica state Beach only to the extent that all of the Beach Parking Spaces are occupied and any Non-Reserved Hotel parking Spaces are not either occupied or blocked off pursuant to section 4 (b) (ii) (B). The determination as to whether the Beach Parking Spaces are all occupied and any Non-Reserved Hotel Parking Spaces are not either occupied or blocked off shall be made for each automobile entering the Subterranean Parking Facility. 4 (b) (ii) (B) The Developer shall have the right in its reasonable business judgment and operational experience to reserve or otherwise "block off" on a daily basis for exclusive Hotel use as many of the Non-Reserved Hotel Parking Spaces as the Developer believes are reasonably necessary to satisfy the anticipated parking - 34 - needs of the Hotel for that given day to accommodate the scheduled activities at the Hotel. 4(c) Public Spaces. 4(c) (i) Except as provided in Sections 4(c) (ii) and 4(c) (iii) two hundred seventy-eight (278) parking spaces at the Project shall be reserved for the use of employees and guests of the community Center and visitors to Santa Monica state Beach ("Public Parking Spacesll), which shall be allocated as follows: 4(c) (i) (A) one hundred seventy-six (176) spaces shall be reserved for use by visitors to the Santa Monica State Beach, including, but not limited to, persons and families utilizing the Public Beach Facility ("Beach Parking Spaces"). 4(c) (i) (B) one hundred two (102) spaces shall be reserved for use by visitors to the community Center, other than persons and families utilizing the Public Beach Facility ("Community Center Parking Spaces"). 4(C) (ii) The Beach Parking Spaces shall be open to the public each day from 7:30 a.m. to 6:00 p.m. during the Non-Peak Activity Period and from 7:30 a.m. to 8:00 p.m. during the Peak Activity Period. The Community Center Parking - 35 - Spaces shall be open to the public from 7:30 a.m. until 30 minutes after the last component in the Community Center closes. At all times after which the Beach Parking Spaces or the Community Center Parking Spaces are closed to the public, those spaces may be utilized for employees and guests of, or visitors to, the Hotel. 4 (c) (iii) During the time in which the Public Parking Spaces are open to the public under Section 4(c) (ii), employees and guests of, or visitors to, the Hotel may utilize the PUblic Parking Spaces subject to all of the following conditions: 4(c) (iii) (A) The Public Beach Spaces may be utilized for Hotel purposes only to the extent that all of the Hotel parking Spaces are occupied and any of the Public Parking spaces are then unoccupied. Such a determination shall be made for each automobile entering the Subterranean Parking Facility. None of the Public Parking Spaces may be reserved or otherwise IIblocked off" for use by employees and guests of, or visitors to, the Hotel. 4(C) (iii) (B) On weekend days during the Peak Activity Period, and on Memorial Day, Fourth of July and Labor Day, no Public Parking Spaces shall be used for Hotel purposes. - 36 - 4 (c) (iii) (C) On weekdays during the Peak Activity Period, no more than fifty (50) of the Public Parking Spaces shall be used for Hotel purposes. 4 (c) (iii) (D) During the Non-Peak Activity Period, no more than one hundred (100) of the Public Parking Spaces may be used for Hotel purposes. 4(d) CQmpact, Tandem and Handicap Spaces. No more than forty percent (40%) of the parking spaces provided under this Agreement shall be striped for compact cars. No more than thirty percent (30%) of the parking spaces provided under this Agreement shall be for Tandem Parking, and none of the Public Parking Spaces shall be for Tandem Parking. An attendant shall park and move all vehicles in all areas of the Subterranean Parking Facility in which Tandem parking is used. Except as provided in Section 9 (b) (vi) (e) , eight (8) non-tandem parking spaces on the P-1 level of the Subterranean Parking Facility shall be designed, labeled and reserved for public use by handicapped or disabled persons. 4(e) Minimum Dimensions. Standard size parking spaces shall be at least eight and one-half (8.5) feet wide by eighteen (18) feet deep. Compact size parking spaces shall be at least seven and one-half (7.5) feet wide by fifteen (15) feet deep. Spaces for Tandem Parking for two (2) cars shall be at least eight and one-half (8.5) feet wide by thirty-three (33) feet deep. Spaces for Tandem Parking for three (3) cars shall be at least eight and one-half (8.5) feet wide by fifty-one (51) feet deep. - 37 - Parking spaces for use by handicapped or disabled persons shall be at least nine (9) feet wide by eighteen (18) feet deep, with a five (5) feet by eighteen (18) feet loading space adj acent to each space. 5. Uses. 5 (a) Permitted Uses. By execution of this Agreement, the City specifically approves, as permitted uses, the following uses of the Property and project, and hereby waives the application of sections 9014.2, 9014.3, 9014.4 and 9014.5 of the Zoning Ordinance to the Project and the Property to the extent these sections are inconsistent with this Agreement: 5(a) (i) Hotel, including each of those attendant uses which are set forth in section 3(a) (i); 5(a) (ii) Community Center, including each of those attendant uses which are set forth in section 3(a) (ii); 5(a) (iii) Subterranean Parking Facility, including those attendant uses which are set forth in Section 3 (a) (iii) ; 5(a) (iv) Such other beach-related recreational and cultural uses available and affordable to the general public which are consistent with the other permitted uses for the Project and compatible with the surrounding neighborhood. - 38 - Except as otherwise provided in this Agreement, no City permits or approvals are required to use the Property or Project for these permitted uses including, without limitation, a use permit, conditional use permit, performance standards permit, zone variance, zone change or any other zoning or planning permit or approval, whether ministerial or discretionary. Nothing in this Section 5(a} is intended, nor should be construed, to obviate any requirements under codes, ordinances, rules, regulations or official policies of the city to obtain licenses and permits in connection with, and as a condition of, the operation of businesses within the city. 5(b) Sale and Consumption of Alcoholic Beverages. 5(b) (i) The City hereby approves a conditional use permit (nCUP") for the on-site sale, dispensing and consumption of alcoholic beverages at the Project, including, without limitation, beer, wine, malt beverages, and distilled spirits. In connection with approving the CUP, the city makes the following findings: 5(b) (i) (A) The proposed use and location are in accordance with good zoning practice, in the public interest, and necessary so that substantial justice be done in that: the Hotel and Community Center are uses permitted in accordance with the Development Agreement; alcohol service is designed to accommodate the needs of Hotel visitors through the availability of alcohol with - 39 - room service, within the Hotel Restaurant, and in mini- bars in the Guest Rooms; and alcohol shall not be served after 12:00 a.m. in the Community Center and users of the Community Center shall not be allowed to bring alcohol to the Community Center. 5 (b) (i) (B) The proposed use is compatible with existing and potential uses within the general area, traffic or parking congestion will not result, the public health, safety, and general welfare are protected, and no harm to adjacent properties will result, in that: the Hotel and Community Center are compatible with other beach-related recreational facilities in the area; the service of alcoholic beverages within the Hotel and Community Center will not significantly increase traffic coming to the Project; the Project provides adequate parking to accommodate the parking demand for the Project; and the Project contains mitigation measures, such as setback limitations, to protect adjacent properties from being impacted by the Project. 5 (b) (i) (C) The welfare of the neighborhood residents will not be adversely affected based on the findings in Sections 5(b) (i) (A) and 5(b) (i) (B) and the fact that alcohol service will be contained within the Project with no service in the Hotel between the hours of 2:00 a.m. and 6:00 a.m. (except for mini-bar service) and - 40 - no service in the community Center between the hours of 12:00 a.m. and 6:00 a.m. 5(b) (i) (D) There will be no detrimental affect on the nearby residentially zoned neighborhoods considering the proximity of the alcohol service on the Project to residential buildings, churches, schools, hospitals, playgrounds, parks, and other existing alcohol outlets in that alcohol service will be an incidental component of the Hotel and Community Center operation and is designed to serve the needs of Hotel visitors, visitors to the Beach Cafe and Community Room and attendees of designated functions in the Arts and Cultural Center. In addition, there will not be any sale of alcohol for off-site consumption. 5(b} (i) (E) The sale of alcohol on the Project for on-site consumption will not contribute to an undue concentration of alcohol outlets in the area, in that the service of alcohol in the Hotel and Community Center will be principally in conjunction with the sale and consumption of food served at the Project. 5(b) (ii) The CUP shall be subject to the following conditions: - 41 - 5(b) (ii) (A) Alcoholic beverages shall not be served in the Community Center between the hours of 12:00 a.m. and 6:00 a.m. 5 (b) (ii) (B) Except as provided in Section 5(b) (ii) (C), alcoholic beverages shall not be served in the Hotel between the hours of 2:00 a.m. and 6:00 a.m. 5(b) (ii) (C) The Hotel may provide mini-bars containing alcoholic beverages in Guest Rooms for the convenience of Hotel guests. 5(b) (ii) (D) No alcoholic beverages shall be dispensed or sold in the Project for consumption outside of the Property. 5 (b) (ii) (E) The findings in Section 5 (b) (i) and the conditions in Sections 5(b) (ii) (A) through 5(b) (ii) (E), inclusive, shall be transmitted to the Alcoholic Beverage Control Board and any other applicable governmental agencies in connection with any applications by Developer for Liquor License Approvals. 5 (b) (iii) If Developer does not receive all licenses, permits and approvals required from other applicable governmental agencies including, but not limited to, the Alcoholic Beverage Control Board and the State Parks and Recreation Commission (collectively, the "Liquor License - 42 - Approvals") to sell and dispense alcoholic beverages for on- site consumption in the Project either on the same terms and conditions set forth in section 5(b)(ii) or other terms and conditions acceptable to Developer in its reasonable business judgment then Developer may elect, in its sole discretion, to terminate this Agreement and the DDA, by delivery to City of a written termination notice. The written termination notice must be delivered by Developer prior to the earlier of: (i) twenty (20) days after the Developer receives notification of the final non-appealable decision of any applicable governmental agencies including, but not limited to, the Alcoholic Beverage Control Board and the state Parks and Recreation Commission, that a required license, permit or approval to sell and dispense alcoholic beverages will not be issued on the terms and conditions set forth above or (ii) the IIstate Approval Period Termination Daten (as such term is defined in the DDA) . 6. Project Mitiqation Measures. To comply with applicable provisions of the General Plan and to mitigate specific burdens upon the community resulting from development of the Project, Developer agrees to provide the following Project mitigation measures: 6(a) Parks and Recreation Fee. Developer shall pay to the City a Parks and Recreation Fee pursuant to Chapter 6C of Article VI of the Santa Monica Municipal Code in effect on the Adoption Date. The Parks and Recreation Fee shall be calculated as - 43 - Two Hundred Dollars ($200.00) for each Guest Room in the Hotel and shall be paid by the Developer prior to, or concurrent with, the issuance of a building permit by the City for construction of the Hotel. 6(b) Art. Developer shall make the following contributions and expenditures for public art, which shall constitute the total public art obligation of the Developer in connection with the project: 6 (b) (i) Prior to issuance of the certificate of Occupancy by the City for the Hotel the Developer shall expend an amount equal to one percent (1%) of the Hard Costs (as defined in the Ground Lease) of the Hotel to pay for Art Elements and Works of Art for the Project (UCity ArtU). The selection, designation and placement by Developer of the city Art within the Project shall be subject to the prior approval of the Santa Monica Arts commission, which approval shall not be unreasonably withheld or delayed. The City Art shall be displayed only in the community Center and exterior portions of the Community Center (including the Sculpture Garden and the Children's Play Area). Developer may not alter, replace, or relocate any of the City Art without the prior approval of the Santa Monica Arts Commission, which approval shall not be unreasonably withheld or delayed. Developer may appeal any decision of the Santa Monica Arts Commission under this Section 6 (b) (i) to the city Council. The decision of the city Council shall be final. Upon expiration of the term or the - 44 - sooner termination of the Ground Lease, title to and ownership of the City Art shall automatically vest in the city without the execution of any further instrument and without paYment therefor by the city. 6(b) (ii) In addition to the City Art, the Developer shall provide on the Project additional Art Elements and Works of Art [the "Developer Artll] such that the aggregate appraised value of the city Art and Developer Art is not less than Two Million Dollars ($2,000,000) at the time of the issuance of the Certificate of Occupancy for the Hotel. Developer shall provide the City with a written appraisal from the Art Appraiser dated not more than thirty (30) days prior to issuance of the Certificate of Occupancy for the Hotel which states that the aggregate appraised value of the city Art and the Developer Art is at least Two Million Dollars ($2,000,000). All Developer Art shall be selected by the Developer in its sole and absolute discretion and displayed throughout the Project in areas chosen by the Developer in its reasonable business judgment. The Developer shall have the right in its reasonable business judgment to alter, change, replace and relocate Developer Art during the term of the Ground Lease. The Developer shall own or lease all Developer Art. Neither the City, the Santa Monica Arts Foundation, nor the Santa Monica Arts Commission shall have any ownership in the Developer Art. - 45 - 6 (b) (iii) At all times during the term of this Agreement, Developer shall comply with both of the following requirements: 6 (b) (iii) (A) The nature and quality of the Developer Art shall be commensurate with the nature and quality of the Developer Art on the Project as of the date of the Certificate of Occupancy. upon written request by the city, Developer shall provide the City no more than once each five (5) years during the term of this Agreement with a written statement from the Art Appraiser stating that the nature and quality of the Developer Art on the Proj ect as of the date of the statement is commensurate with the nature and quality of the Developer Art on the Project as of the date of the certificate of Occupancy. 6(b) (iii) (B) The aggregate appraised value of the city Art and the Developer Art shall not be less than Two Million Dollars ($2,000,000). Upon written request by the city, Developer shall provide the City no more than once each five (5) years during the term of this Agreement with a written appraisal from the Art Appraiser stating that the aggregate appraised value of the city Art and the Developer Art is at least Two Million Dollars ($2,000,000) . - 46 - 6(b) (iv) In recognition of the substantial public art contribution for the proj ect by Developer under this Section 6(b), the obligations of Developer to construct the Art and Environment Center in the Community Center under the Ground Lease and the obligation of the Developer to operate the Art and Environment Center pursuant to the Ground Lease and the Community Center Operating Agreement, the City agrees that the Developer shall have no obligation to pay any fees established by the city for public art with respect to the Project at any time during the term of this Agreement. 6(c) Mitiqation Measures. Developer shall comply with all of the EIR mitigation requirements enumerated on Exhibit "C" in connection with the design and development of the Project. 6(d) No Additional Mitiqations. Except as specifically set forth in this section 6 or as otherwise provided in this Agreement, the City shall not be entitled to impose any mitigation measures or fees in lieu thereof on the Project for impacts caused by development of the Project. 6(e) state Law. Nothing in this Section 6 or any other provision of this Agreement or the exhibits hereto is intended, nor should be construed, to obviate any monitoring and enforcement requirements for the mitigation measures in the EIR as more specifically set forth in Public Resources Code section 21081.6. - 47 - 7. Non-Discrimination, Affirmative Action and Job Traininq. 7(a) Developer shall not discriminate against any employee or applicant for employment in the Project on the basis of race, religion or creed, sex, marital status, national origin, age, sexual orientation, handicap, or acquired immune deficiency syndrome (as defined in Santa Monica Municipal Code section 4951), and shall cause a similar provision to be inserted in any contract for work entered into by the Developer relating to the proj ect other than purchase orders for standard commercial supplies, materials or goods. 7 (b) Subj ect to the provisions of section 7 (a) above, the Developer shall develop and submit to the City for approval prior to the commencement of construction of the proj ect a sui table affirmative action program for the hiring of labor and the obtaining of materials during construction relating to employment, upgrading, demotion or transfer, recruitment or recruitment advertising, lay-off or termination, rates of payor other forms of compensation and selection for training, including apprenticeship. Any such plan shall recognize the necessity of compliance with standard union hiring practices and shall not establish quotas of any kind. 7(c) Prior to the issuance by the city of a certificate of Occupancy for any building in the Project, the Developer shall designate a representative whose responsibility it shall be to identify those employment opportunities suitable for affirmative - 48 - action, to develop and submit to the City for approval a program designed to effectively address affirmative action and to implement the program following City approval. 7(d) Developer shall, in all solicitations or advertisements for employees in connection with the Project placed by or on behalf of the Developer, state that all qualified applicants shall receive consideration for employment without regard to race, religion or creed, sex, marital status, national origin, age, sexual orientation, handicap, or acquired immune deficiency syndrome (as defined in Santa Monica Municipal Code Section 4951). 8. General Services Requirements. Sea) Compliance with Requirements. Developer shall comply with all requirements of the city's Department of General Services as enumerated in Exhibit "011. Except as specifically set forth in Exhibit nDII, Developer' s right to develop the Proj ect shall not be conditioned upon any other requirements of the Department of General Services. 8(b) Public Sewer Capacity Allocation. 8(b) (i) In order to mitigate the projected sewage flows from the Project, Developer shall, at its option, elect one of the following two (2) options, either of which the city acknowledges and agrees constitutes compliance with the - 49 - wastewater reduction mitigation measure in the EIR set forth in Exhibit C to this Agreement: 8(b) (i) (A) perform or cause to be performed the retrofitting of off-site buildings and residences in the city at locations to be approved by the city, which approval shall not be unreasonably withheld or delayed, with ultra low-flow toilets and low-flow showerheads so as to reduce the projected sewage flows from those buildings and residences to such a level that such reduction when combined with the projected sewage flows from the Project will result in a zero net flow, or 8(b) (ii) (B) pay to the city an in-lieu fee of Eighty-Nine Thousand Four Hundred Twenty-Five Dollars ($89,425), which monies shall be utilized by the city to perform retrofitting of off-site buildings and residences in the city with ultra low-flow toilets and low-flow showerheads. 8(b) (ii) Upon compliance by the Developer with the provisions of either Section 8 (b) (i) (A) or 8 (b) (i) (B) the City shall promptly process and approve any application by the Developer for sewer allocation permits for the Project and shall promptly issue such permits, so long as prior to the issuance of the permits, Developer pays the applicable sewage facilities charge in accordance with section 7190 of Ordinance No. 1451 (CCS) in effect on the Adoption Date. - 50 - 8 (b) (iii) If Developer chooses to perform the retrofitting outlined in section 8(b) (i) (A) above, the city shall assist the Developer in its efforts to identify opportunities for the retrofitting of off-site buildings and residences in the city with ultra low-flow toilets and low- flow showerheads. 9. Chanqes to Pro;ect. If, during the term of this Agreement, Developer desires to make any Floor Area Changes or changes to the subterranean areas of the Project in accordance with the Al ternati ve Subterranean Plans, Developer shall do so in accordance with the provisions of this section, the DDA and the Ground Lease. 9(a} Floor Area Changes. 9(a) (i) Upon approval of the Zoning Administrator (or the City Council on appeal), Developer may, wi thout amending this Agreement, increase the Floor Area of the specific components of the Hotel and the Community Center which are specifically set forth in Sections 3 (b) (i) and 3 (b) (ii) respectively by five percent (5%) (If Floor Area Changesll). Such approval shall require specific findings by the Zoning Administrator (or the City Council on appeal) that the proposed increase in Floor Area: 9(a) (i) (A) is consistent with the provisions, purposes and goals of this Agreement; - 51 - 9 (a) (i) (B) will not significantly and adversely affect the architectural integri ty of the Project or the public benefits associated with the Project; 9 (a) (i) (C) will not cause the total Floor Area of either the Project, the Hotel or the Community Center to exceed the respective maximum Floor Areas set forth in Section 3(b); 9(a) (i) (D) will not result in an increase in peak hour trips for the proj ect (calculated upon the then current rates published by the Institute of Traffic Engineers or a comparable index); 9(a) (i) (E) will not cause the total number of parking spaces required for the Proj ect to exceed the number of on-site parking spaces provided at the Project: and 9(a) (i) (F) if there is a proposed increase in Floor Area of any component of the Community Center, such increase will not have a material adverse impact on any other component of the community Center. 9(a) (ii) The procedure for obtaining approval of a Floor Area Change shall be as follows: - 52 - 9(a) (ii) (A) The Developer shall file a letter application with the city Planning Division. The application shall specify the specific Floor Area Change being requested and shall include plans describing such change in a form approved by the Zoning Administrator. If there is a proposed increase in Floor Area of any component of the Community center, the letter application shall specify the impacts of the proposed increase, if any, on any other components in the Community Center. 9(a) (ii) (B) The fee for any such application shall be the then current fee uniformly established by the City for the filing and processing of variance applications. 9 (a) (ii) (C) The Zoning Administrator shall have thirty (30) days within which to determine the completeness of the application. If the Zoning Administrator determines the application to be incomplete, the Zoning Administrator shall promptly provide the Developer with written notice that the application has been deemed incomplete, and such notice shall itemize the grounds upon which the Zoning Administrator has determined the application to be incomplete. Upon a determination of incompleteness, the application may be resubmitted by the Developer providing the Zoning Administrator with the supplemental information requested in the notice of incompleteness. - 53 - The zoning Administrator shall then have an additional thirty (30) days to determine whether the application is complete. 9 (a) (ii) (D) A public hearing before the Zoning Administrator shall be conducted not less than ten (10) days nor more than sixty (60) days after the application is determined to be complete, and notice of such hearing shall be given in a manner consistent with the city's standard noticing procedures for a variance application. 9(a) (ii) (E) Following the public hearing, the Zoning Administrator shall prepare a written decision within thirty (30) days which shall contain the findings of fact upon which such decision is based and, in the case of approval, any conditions of approval. In order to approve such an application, the Zoning Administrator must make the findings set forth in Section 9(a) (i). 9 (a) (ii) (F) A statement of official action shall be issued by the Zoning Administrator on the date of the Zoning Administrator's decision. A copy of the statement of official action shall be provided to the Developer by the Zoning Administrator in accordance with Section 27. 9(a)(ii)(G) Any person may appeal the approval, conditions of approval or denial of the application to the City council if a written notice of - 54 - appeal is filed with the city Clerk within fourteen (14) days following the date of decision. The appellant shall state the specific reasons for the appeal in the written notice of appeal. Any such appeal shall utilize the procedure then uniformly established by the city for the appeal of variance applications and shall be accompanied by the filing fee then required under that procedure. PUblic notice of an appeal hearing shall conform to the manner in which the notice of the original hearing was given. A copy of the written notice of appeal shall be provided to the Developer by the city in accordance with Section 27. 9 (a) (ii) (H) A public hearing on the appeal shall be held by the city Council no more than sixty (60) days after the notice of appeal is filed with the City Council. Following the public hearing, the City council shall either affirm, reverse, or modify the decision of the Zoning Administrator. A Statement of Official Action shall be issued by the city Council within forty-five (45) days following the public hearing. The decision of the City Council shall contain the same findings required for a decision of the zoning Administrator. Failure of the City Council to either affirm, reverse or modify the decision of Zoning Administrator within such forty-five (45) day periOd shall constitute an affirmance. - 55 - 9 (a) (ii) (I) All public hearings conducted pursuant to this subsection shall be conducted in accordance with the then applicable procedural rules of the hearing body. 9 (a) (ii) (J) Once the appeal is filed, the appellant body may review and take action on all determinations, interpretations, decisions, judgments, or similar actions taken which were in the purview of the original hearing body on the application and is not limited to only the matters appealed or grounds for the appeal as stated in the notice of appeal. 9(b) Subterranean Changes. without amending this Agreement, Developer may elect to develop the subterranean areas of the Project substantially in accordance with Drawings 2A, 6A and 7A of the Project Plans ("Alternative Subterranean Plans") instead and in lieu of developing the subterranean areas of the Project substantially in accordance with Drawings 2, 6 and 7 of the Project Plans. Such election shall be exercised by Developer upon written notice to the Zoning Administrator together with plans submitted by the Developer which reasonably evidence that under the Alternative Subterranean Plans: 9 (n) (i) no portion of the subterranean area of the Project will be located in the Reserved Area: - 56 - 9(b)(ii) the Floor Area of the Hotel Spa in the subterranean area of the Project does not exceed 9,678 square feet: 9 (b) (iii) the gross square footage of the Hotel does not exceed 283,654 square feet: 9 (b) (iv) the aggregate Floor Area of ancillary Hotel uses (other than the Hotel Spa and the Subterranean Parking Facility) in the subterranean area of the Project does not exceed 17,182 square feet: 9 (b) (v) the final revised layout for the Subterranean Parking Facility is submitted to the Zoning Administrator and the city's Parking and Traffic Engineer for their approval, which approval shall not be unreasonably withheld or delayed, prior to the issuance of any building permit for the Project; and 9 (b) (vi) all of the parking requirements of Section 4 of this Agreement are satisfied, except for the following permitted modifications: 9(b} (vi) (A) A minimum of five hundred twenty- five (525) total parking spaces shall be provided in the Subterranean Parking Facility. 9(b) (vi) (B) There shall be a minimum of two hundred forty-two (242) Hotel Parking Spaces. - 57 - 9(b) (vi) (e) There shall be a minimum of ninety-two (92) Non-Reserved Hotel Parking Spaces. 9(b) (vi) CD) A minimum of seven (7) non-tandem parking spaces on the P-l level of the Subterranean Parking Facility shall be designed, labeled and reserved for public use by handicapped or disabled persons. 9(c) Acceleration Lane. In the event that the installation of an acceleration lane on the southbound portion of Pacific Coast Highway adjacent to the Project is required by the State Department of Transportation or by the terms and conditions of this Agreement, the Developer may develop the Project substantially in accordance with Drawings ID and 9A of the Project Plans instead and in lieu of developing the Project substantially in accordance with Drawings 1 and 9 of the Project Plans without amending this Agreement. 9(d) ARB and Landmarks Commission Chanqes. In the event that changes to the Project are required by the ARB (or by the Planning Commission following appeal of the determination of the ARB) pursuant to section 12(e) of this Agreement or are required by the Landmarks Commission (or by the City Council following appeal of the determination of the ARB) pursuant to section 14(c) of this Agreement, the Developer may incorporate such required changes into the Project without amending this Agreement. - 58 - 9 (e) Major Changes. Except as otherwise provided in this Agreement, any other changes to the Project shall require an amend- ment to this Agreement in accordance with the provisions of Santa Monica Municipal Code Section 9800 et seg., Government Code section 65864 et seq. and this Agreement. 10. Rent Control Board Aoorovals. Prior to demolition of the existing structures located on the Property (other than the North House which shall be relocated and preserved in accordance with the provisions of this Agreement), the Developer shall be required to comply with one of the following requirements: 10(a) Obtain all permits, approvals or other determinations, if any, deemed necessary by the city Attorney for the Project to be developed consistent with the Santa Monica Rent Control Law, which may include a removal permit from the Rent Control Board, one or more exemption determinations from the Rent Control Board, or other Rent Control Board determinations that the Property, or a portion thereof, is not subject to the jurisdiction of the Rent Control Board. The city shall cooperate with the Developer to the extent reasonably necessary in Obtaining the requisite permits, approvals or administrative determinations; or 10(b) Obtain an enforceable court order indicating that the existing structures may be demolished without obtaining any further permits, approvals or other determinations by the Rent Control Board. - 59 - 11. Assignment; Binding Effect. Developer shall not sell, transfer, exchange, hypothecate, encumber or otherwise dispose of its interest in the Property or the Project, or any interest therein, except as permitted under the DDA and the Ground Lease. Any transfer of Developer1s interest under the ODA or Developer's leasehold interest under the Ground Lease which is permitted or required under or pursuant to the DDA and the Ground Lease shall automatically operate to transfer with such interest the benefits, rights, burdens, duties and obligations of this Agreement. This Agreement shall not be severable from Developer1s interest in the Property and the Project. In the event of a permitted transfer to a third party transferee, Developer shall be released from its obligations under this Agreement with respect to the Property and Project, or any interest therein, so transferred, except for those obligations which have accrued or matured prior to the date of such transfer; provided, however, that such release shall be conditioned upon the delivery to the city of an assumption agreement executed by the third party transferee in form and content reasonably satisfactory to the city. 12. Effect of Agreement on Land Use Requlations. 12 (a) ADDlication of Existino Reaulations. Except as specifically provided in this section 12 or otherwise in this Agreement, development of the Property and the Project, including without limitation, density, permitted uses, intensity of use, design and improvement shall be governed by the Existing Regulations. Development of the Property and the Proj ect shall not - 60 - be governed by any amendments, revisions, additions or deletions to the Existing Regulations or new laws or regulations of the city governing or affecting development adopted subsequent to the Adoption Date including, without limitation, any commercial allocation program or similar program of the city intended to control the future rate of commercial or hotel growth in the city, or any future revisions to the General Plan or the Zoning Ordinance resul ting from the City's Growth Management strategy (sometimes collectively, "Subsequent Code Changes"), unless: 12(a) (i) the City and the Developer mutually agree in writing; or 12(a) (ii) the Subsequent Code Changes are mandated and required by changes in state or federal laws or regulations as provided in Government Code Section 65869.5; or 12(a) (iii) the Subsequent Code Changes satisfy all of the following conditions: 12(a) (iii) (A) the Subsequent Code Changes do not impair the rights of the Developer to develop the Property as contemplated in this Agreement; 12 (a) (iii) (B) if Subsequent Code Changes distinguish between "existingll development and "new" or "proposedll development, the Project shall be considered - 61 - to be an "existingll development (other than with respect to changes to the Administrative and Technical Construction Codes of the city (Article VIII, Chapter 1 of the Santa Monica Municipal Code) for which purpose the Project shall be considered as a "new" development until the Certificate of Occupancy of the Project is issued]; and 12(a) (iii) (C) the Subsequent Code Changes are uniformly applicable to all uses and buildings which are similar to the uses and buildings permitted in the Project throughout the city. 12 (b) Transportation Manaqement proqram Fee. The Developer shall comply with any ordinance which may be adopted by the City council subsequent to the Adoption Date to establish a Transportation Management Plan (IITMP Ordinance"). In the event that the TMP Ordinance becomes effective prior to the issuance of a Certificate of Occupancy for the Hotel, Developer shall comply with any fees established pursuant to the TMP Ordinance as if the Project were deemed to be nnewn construction and not "existing" construction under the TMP Ordinance; provided, however, all trips related to the Reserved Public Spaces shall be excluded from calculation of the fees the Developer is required to pay under the TMP Ordinance. 12 (c) Processinq and Permit Fees. Developer shall be subject to all City-imposed application, processing and permit fees - 62 - and charges, including utility connection fees, with respect to applications for development and construction within the Property which are in effect on the date on which each application is filed, so long as such fees and charges are in force and effect on a City-wide basis. 12(d) Inconsistent Code Provisions. As applied to this Agreement and the Project, any provisions of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Agreement, are hereby modified to the extent necessary to effect the provisions of this Agreement. 12(e) Architectural Review Board. Elements of building design directly related to building colors and materials, lighting, trash enclosures screening, signage and landscaping for the Project and those EIR mitigation measures enumerated on Exhibit "c" to this Agreement related to the design of the Project will be reviewed by the City's Architectural Review Board ("ARB") in accordance with design review procedures in effect under the Existing Regulations. The ARB shall have no authority to disapprove or conditionally approve any features of the Project which have been specifically approved by this Agreement or in the Project Plans, including, without limitation, Building Height, number of floors, the size and location of Hotel component uses as set forth in Section 3(b) (i) and the size and location of Community Center component uses as set forth in Section 3(b) (ii). - 63 - 13. certificates of Occupancy. Upon completion of any portion of the project for which a separate building permit has been issued in compliance with such building permit, the Existing Regulations, this Agreement and other applicable agreements between city and Developer, the City shall promptly issue a Certificate of Occupancy therefor to Developer. 14. Permits and Approvals. 14(a) Issuance of Necessary Permits and Approvals. The Developer shall satisfy all of the following requirements as a condition to the obligation of the city to grant or issue the approvals, consents or permits which are the subject of section 14(b): 14(a) (i) satisfactory completion by the Developer of all actions required prior thereto under (A) this Agreement, (B) Existing Regulations, (C) any Subsequent Code Changes applicable to the development of the Property and the Project pursuant to section 12(a) and (D) any codes, ordinances, rules, regulations and official policies and condi tions of approval of the city which do not affect development of the Property and the Project, 14(a) (ii) the issuance of any and all approvals of the City which are required prior thereto by this Agreement and which this Agreement specifically provides are discretionary with the City, - 64 - 14 (a) (iii) the issuance of any and all approvals of the state which are required prior thereto, 14 (a) (iv) fees, if any, the payment of applicable processing 14 (a) (v) approval by the city of a property maintenance plan submitted by Developer in accordance with Santa Monica Municipal Code section 9048.1, and 14(a) (vi) compliance by the Developer with the provisions of section 10 of this Agreement. 14(b) City Approvals and Permits. Upon satisfaction by Developer of the requirements set forth in Section 14(a), the city shall promptly commence and diligently proceed to complete all applicable City procedures and processes then uniformly in effect to grant or issue the approvals, consents, or permits which are necessary or reasonably desired by the Developer for the development by the Developer of the Project and the Property in accordance with the Project Plans and this Agreement, including, but not limited to, the following: 14(b) (i) The processing, checking and approval of all applications, plans, land use and zoning permits, building plans and specifications and other plans relating to the development of the Project and the Property which have been filed by the Developer. - 65 - 14(b) (ii) The processing, checking and approval of all applications for building and related mechanical, electrical, plumbing and other ancillary permits necessary for the completion of the development of the Project. If requested by Developer, the City shall promptly review and thereafter issue a separate building permit and ancillary permits for the Hotel and the Community Center upon Developer's submission to the City of plans which conform to the Administrative and Technical Construction Codes of the city (Article VIII, Chapter 1 of the Santa Monica Municipal Code) in effect at the time of the permit application. 14 (b) (iii) The processing, checking and approval of applications by the Developer for demolition permits and excavation or grading permits for the Project as part of a phased building permit for the project. 14 (c) Landmarks Commission Review. The exterior features and treatment of the North House will be reviewed by the Landmarks Commission in accordance with the Certificate of Appropriateness procedures in effect under the Existing Regulations, except that the certificate of Appropriateness shall be effective for a period of two and one-half (2-1/2) years from the date of issuance by the Landmarks Commission. Such review shall not preclude the addition of the Plinth or the relocation of the North House to the Plinth. The Developer shall comply with the EIR mitigation measures identified in the Exhibit "C" to this Agreement related to historic preservation. The review of the - 66 - Landmarks Commission shall include only those elements of the Project which are specifically set forth in this section 14(c) or in Exhibit "c" to this Agreement. 15. Proor ietary Caoaci tv . Notwithstanding section 14 (a), the City's obligations as provided in this Agreement shall not impair or result in any diminution of city's rights as provided in the DDA and the Ground Lease, and no governmental approval by City shall satisfy or be deemed to satisfy any requirement for City's approval as provided in the DnA or the Ground Lease. 16. periodic Review of Compliance with Aqreement. 16 (a) City Review. The city shall review this Agreement at least once in every twelve (12) month period from the Adoption Date. 16 (b) Required Findinqs. During each periodic review by the City, Developer shall be required to demonstrate good faith compliance with the terms of this Agreement. In connection therewith, on or before July 1st of each calendar year during the term of this Agreement, the Developer shall provide a written report to the City in which an officer of the Developer certifies good faith compliance by the Developer with the terms of this Agreement during the prior calendar year, except for those areas of non-compliance which are specifically set forth in the written report together with the reasons advanced by the Developer for non- compliance. If, as a result of such periodic review, the City - 67 - Council finds and determines, on the basis of substantial evidence, that the Developer has not complied in good faith with the terms or conditions of this Agreement, the city Council shall commence proceedings to enforce, modify or terminate this Agreement. 16 (c) Evidence of Good Faith Compliance. Evidence of good faith compliance by the Developer under this Section 16 may include, but is not necessarily limited to, the following: 16(c) (i) Conformance with the requirements of the Existing Regulations, except as otherwise modified by this Agreement; 16 (c) (ii) Conformance by the Developer with the terms and conditions of this Agreement. 16(d) Public Hearing. If the City should determine on the basis of substantial evidence that the Developer has not complied in good faith with the terms and conditions of this Agreement, and further determines to proceed with modification or termination of this Agreement in accordance with Section 16 (b), the City shall provide written notice to the Developer of its intention to modify or terminate this Agreement unless the Developer cures or corrects the acts or omissions that constitute the basis of such determinations by the city. The notice shall be delivered by the city to the Developer in accordance with Section 27 and shall contain: - 68 - 16(d) (i) The time and place of a public hearing to be held by the City Council, no less than thirty (30) days after del i very of the notice to Developer, on the determination of the City to proceed with modification or termination of this Agreement; 16(d) (ii) A statement as to whether the Ci ty proposes to modify or terminate this Agreement; and 16(d) (iii) Any proposed modifications to this Agreement. If, following the conclusion of the public hearing, the city Council determines that the Developer has not been in good faith compliance with this Agreement and further determines that the Developer has not cured the acts or omissions that constitute the basis of that determination (or, if those acts or omissions could not be reasonably remedied prior to the public hearing, that Developer has not in good faith commenced to cure or correct such acts or omissions prior to the public hearing or is not diligently and continuously proceeding therewith to completion), the City Council may take such action as it deems necessary to protect the interests of the city pursuant to this Agreement. 17. Enforcement. subject to the provisions of Section 42, this Agreement is enforceable by any party to it notWithstanding a change in any applicable general or specific plan, zoning, - 69 - subdivision or building regulations adopted by the city which alter or amend the Existing Regulations. 18. Validity of Agreement. In any litigation concerning this Agreement, neither party hereto shall assert as a claim or defense the invalidity of this Agreement. 19. Default. 19(a) Developer Defaults. The happening of one or more of the following events shall be a "Developer Defaultll under this Agreement: 19(a) (i) the Developer shall fail to pay to the city any amount due under Section 6(a) as and when due, and such failure to pay continues for a period of ten (10) days after written notice from city; 19(a) (ii) the Developer shall fail to perform or comply in good faith with any of the other agreements, terms, covenants or conditions of this Agreement on Developer's part to be performed or complied with, and such nonperformance or noncompliance shall continue for a period of thirty (30) days after written notice from city, or, if such performance cannot reasonably be completed within such thirty (30) day period, Developer shall not in good faith have commenced such performance within such thirty (30) day period or shall not diligently and continuously proceed therewith to completion; - 70 - 19(a) (iii) a finding and determination by the city council is made upon the basis of substantial evidence following a periodic review under Section 16 that Developer has not complied in good faith with the terms or conditions of this Agreement and has not cured or corrected the act(s) or omission(s) which were the basis for such determination; 19(a) (iv) an express repudiation, refusal or renunciation of this Agreement is made by Developer, if the same is in writing and signed by the Developer. 19(b) the following Agreement: city Defaults. events shall be The happening of one or more of a IICity Default" under this 19 (b) (i) The City shall fail to comply in good faith with the requirements of any of the agreements, terms, covenants or conditions of this Agreement on the City's part to be performed or with which the city must comply and such failure shall continue for a period of thirty (30) days after written notice from the Developer, or, if such failure cannot reasonably be remedied by city within such thirty (30) day period, City shall not in good faith have commenced to cure such failure within such thirty (30) day period or shall not diligently and continuously proceed therewith to completion; - 71 - 19(b) (ii) an express repudiation, refusal or renunciation of this Agreement is made by the City, if the same is in writing and signed by the City Manager. 20. Procedure Upon Default. 20 (a) Termination by city. Subject to Section 20 (c) , upon the occurrence of a Developer Default, the City may terminate this Agreement upon written notice to Developer or, in the case of a Developer Default under Section 19(a) (iii) hereof, the City may modify or terminate this Agreement pursuant to procedures set forth in section 16. 20(b) Termination by Developer. Upon the occurrence of a City Default for failure by the city to comply in good faith with the requirements of this Agreement regarding the permitted use and development of the Property, including without limitation, the obligations of the city under this Agreement to review and issue permits and approvals applied for by Developer in connection with the development of the Project or use of the Property, Developer may terminate this Agreement upon written notice to the City. 20(c) Remedies Cumulative. Any right or remedy of the parties under this Agreement and any other right or remedy that either party may have at law or equity, including specific performance, upon the breach of any covenant, agreement, term, provision or condition in this Agreement by the defaulting party shall be distinct, separate and cumulative rights or remedies and - 72 - no one of them, whether exercised by the non-defaulting party or not, shall be deemed to be in exclusion of any other. The non-defaulting party may, in its discretion, exercise any and all of its rights and remedies, at once or in succession, at such time or times as the non-defaulting party considers appropriate. 20 (d) Cessation of Riqhts and Obliqations. Except as otherwise provided in this Agreement, if this Agreement is terminated on account of Developer Default or City Default, the rights, duties and obligations of the parties hereunder shall cease as of the date of such termination. If the City is the terminating party, then any and all benefits, including money received by the City, shall be retained by city. 20(e) survival of Obliqations. Notwithstanding any other provision of this Agreement to the contrary, the Developer's and the City's obligations to payor perform obligations accrued prior to the date of any termination of this Agreement shall survive any such termination and shall be enforceable after such termination. 21. Notice of Termination. Upon termination of this Agreement as to the Property and the proj ect, or any portion thereof, the parties hereto shall execute an appropriate notice of termination suitable for recording in the official records of Los Angeles County. - 73 - 22. Leasehold Mortqaqee's Riqht to Cure. 22 (a) If there is a Developer Default, each Leasehold Mortgagee shall have the right to remedy such Developer Default, or cause the same to be remedied within the period and otherwise as provided in this Section 22. The city will accept performance by any such Leasehold Mortgagee of any covenant, condition or agreement on Developer's part to be performed hereunder with the same force and effect as though performed by Developer. If specifically set forth in a Leasehold Mortgage, Developer authorizes a Leasehold Mortgagee to take any such action at such Leasehold Mortgagee's option and authorizes entry upon the Property by a Leasehold Mortgagee for such purpose. 22(b) Each Leasehold Mortgagee shall give notice to the City specifying the name and address of such Leasehold Mortgagee and attaching thereto a true and complete copy of the Leasehold Mortgage held by the Leasehold Mortgagee (f1Leasehold Mortgagee Noticell), and once such Leasehold Mortgagee Notice shall be given, the City shall thereafter send to such Leasehold Mortgagee a copy of each notice of default from the city to the Developer ("Default Notice") at the same time as and whenever any such Default Notice shall be given to the Developer addressed to such Leasehold Mortgagee at its address last furnished to the city by such Leasehold Mortgagee by notice to Landlord in accordance with Section 27 herein. Any Leasehold Mortgagee which fails to deliver to the City a Leasehold Mortgagee Notice in accordance with this Section 22(b) shall have no rights under this Agreement. - 74 - 22(c) In the event that the Developer does not cure the Developer Default set forth in the Default Notice within the applicable time periods provided in this Agreement, the City shall send each Leasehold Mortgagee (which has furnished a Leasehold Mortgagee Notice to the city) written notice of Developer's failure to cure (IIFailure to Cure Noticell). Upon delivery of the Failure to Cure Notice, each such Leasehold Mortgagee shall then have an additional twenty (20) days to cure any monetary defaults and an additional forty-five (45) days to cure any non-monetary defaults; provided, however, if such non-monetary cure cannot reasonably be completed within said time periods, the Leasehold Mortgagee shall be entitled to such additional time as is necessary to complete the cure if the Leasehold Mortgagee has, in good faith, commenced to cure within said time periods and shall thereafter prosecute the same with diligence and provided that all other obligations of Developer under this Agreement are being performed in accordance with the provisions of this Agreement. 22 (d) The period of time given to the Leasehold Mortgagee to cure or commence to cure any Developer Default which reasonably requires that said Leasehold Mortgagee be in possession of the Property to do so, shall be deemed extended to include the period of time reasonably required by said Leasehold Mortgagee to obtain such possession (by foreclosure, the. appointment of a receiver or otherwise) promptly and with due diligence; provided, however, that during such period all other obligations of Developer under this Agreement are being duly performed. If the Developer Default shall be cured and the Leasehold Mortgagee shall - 75 - discontinue such foreclosure proceedings, this Agreement shall continue in full force and effect. If a Leasehold Mortgagee is complying with all other obligations of Developer under this Agreement, upon the acquisition of the leasehold estate of Developer under the Ground Lease by such Leasehold Mortgagee or its designee or any other purchaser at foreclosure or otherwise, this Agreement shall continue in full force and effect. 22 (e) No Leasehold Mortgagee shall become liable under the provisions of this Agreement unless and until such time as it takes possession or becomes the owner of the leasehold estate covered by its Leasehold Mortgage, and then only for obligations arising or accruing during or with respect to the time it is in possession or a lessee under such leasehold estate; but the preceding portion of this sentence shall not limit or restrict in any way the city I s authority to terminate this Agreement, as against any Leasehold Mortgagee as well as against the Developer, if any default hereunder (including, without limitation, any default in the payment of any amount due) is not completely cured within the time period allowed hereunder for such cure. 23. Duration of Agreement. This Agreement shall expire upon the expiration of the term, or sooner termination, of the Ground Lease (or upon expiration or termination of the DDA prior to the date that the Ground Lease is executed and delivered and becomes effective). After expiration or full satisfaction of this Agreement the parties shall execute an appropriate certificate of - 76 - termination which shall be recorded in the official records of Los Angeles County. 24 . Supersedure by Subsequent Laws. I f any agency other than the City passes any law or regulation ("Lawlf) after the date of this Agreement or takes or refuses to take any action which prevents, precludes or impairs compliance with one or more provisions of this Agreement, then the parties shall meet and confer in good faith to determine the feasibility of modifying or suspending one or more provisions of this Agreement to comply with such new Law or to address the action or refusal to act based upon the effect such modification or suspension would have on the purposes and intent of this Agreement. In addition, the Developer shall have the right to challenge the new Law or the action or refusal to act which prevents compliance with the terms of this Agreement, and, in the event such challenge is successful, this Agreement shall remain unmodified and in full force and effect. The provisions of this Section 24 shall not apply to any action or inaction by the state or any agency thereof during the State Approval Period, as defined in the DDA. 25. Estoppel Certificate. Either party may, at any time, and from time to time, deliver written notice to the other party requesting such party to certify in writing: 25 (a) that this Agreement is in full force and effect, - 77 - 25(b) that this Agreement has not been amended or modified, or if so amended, identifying the amendments, 25 (c) whether or not, to the knowledge of such party, the requesting party is in default or claimed default in the performance of its obligations under this Agreement, and, if so, describing the nature and amount, if any, of any such default or claimed default, and 25 (d) whether or not, to the knowledge of such party, any event has occurred or failed to occur which, with the passage of time or the giving of notice, or both, would constitute a default and, if so, specifying each such event. A party receiving a request hereunder shall execute and return such certificate within thirty (30) days following the receipt thereof. The city Manager shall have the right to execute any certificate requested by the Developer hereunder. A transferee, Leasehold Mortgagee or other parties may rely upon information given in such certificate. 26. Recording of Aqreement. The parties hereto shall cause this Agreement to be recorded in the Official Records of the county of Los Angeles. The cost, if any, of recording this Agreement shall be borne by the Developer. 27. Notices. Any notice, demand, request, consent, approval or communication which either party is required to or may give to - 78 - the other hereunder shall be in writing and shall be delivered or addressed to the other at the address below set forth or to such other address as either party may from time to time direct by written notice given in the manner herein prescribed, and such notice or communication shall be deemed to have been given or made when communicated by personal delivery or by independent courier service or by facsimile or if by mail on the fifth (5th) business day after the deposit thereof in the United states Mail in Los Angeles County, California, postage prepaid, registered or certified, addressed as hereinafter provided. All notices, demands, requests, consents, approvals or communications from the Developer to the City shall be addressed to the city at: city of Santa Monica 1685 Main street Santa Monica, California 90401 Attention: City Manager Facsimile Number: (213) 394-2962 with copies to: city Attorney city of Santa Monica 1685 Main street Santa Monica, California 90401 Facsimile Number: (213) 395-6727 And, Skadden, Arps, Slate, Meagher & Flom 300 South Grand Avenue Los Angeles, California 90071-3144 Attention: Richard S. Volpert, Esq. Facsimile Number: (213) 687-5600 All notices, demands, requests, consents, approvals or communications from the City to the Developer shall be addressed to the Developer at: - 79 - Pacific Beach Development Limited Partnership c/o Michael's Restaurant 1147 Third Street Santa Monica, California 90403 Attention: Michael Mccarty Facsimile Number: (213) 458-3922 with a copy to: Lawrence & Harding, P.C. 1250 sixth street, suite 300 Santa Monica, California 90401 Attention: Richard A. Lawrence, Esq. Facsimile Number: (213) 458-1959 28. Entire Aqreement. This Agreement sets forth all of the agreements, conditions and understandings between the City and the Developer relative to the Property and the project (except for the DDA, the Ground Lease and the Community Center operating Agreement) and there are no promises, agreements, conditions or understandings, oral or written, expressed or implied, between them other than as set forth or as referred to herein, other than in the DDA, the Ground Lease and the Community Center Operating Agreement. 29. No Oral Modification. No statement, action or agreement hereafter made shall be effective to change, amend, waive, modify, discharge, terminate or effect an abandonment of this Agreement in whole or in part unless such statement, action or agreement is in writing and signed by the party against whom such change, amendment, waiver, modification, discharge, termination or abandonment is sought to be enforced. 30. Table of Contents and section Headinqs. The table of contents and section headings are inserted herein only for - 80 - convenience and are in no way to be construed as part of this Agreement, or as indicative of the meaning of the provisions of this Agreement or the intention of the parties, or as a limitation on the scope of the particular sections to which they refer. 31. Severability: Invalidity of Particular Provisions. If any term or provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those to which it is held invalid or unenforceable, shall not be affected thereby, and each other term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law. 32. No Partnership or Joint Venture. Nothing in this Agreement shall be deemed to create a partnership or joint venture between the City and the Developer or to render either party liable in any manner for the debts or obligations of the other. 33. Attorneys I Fees. If any suit shall be brought because of breach or alleged breach of any covenant or condition herein contained on the part of the Developer or the City to be kept or performed, the prevailing party shall be entitled to reasonable attorneys' fees in addition to court costs and any and all other costs recoverable in said action. Such attorneys' fees shall be paid whether or not such action is prosecuted to judgment. In any case where this Agreement provides that the city or the Developer - 81 - is entitled to recover attorneys' fees from the other, the party so entitled shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys (authorized to provide such services) employed by it as well as any attorneys' fees actually paid by it to third parties in connection with such action. 34. Exhibits. All exhibits attached hereto and/or referred to in this Agreement are incorporated herein as though set forth in full. 35. Construction. The parties agree that each party and its counsel have reviewed and revised this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Agreement or any amendments or exhibits hereto. 36. Governing Law. This Agreement shall be governed exclusively by the provisions hereof and by the laws of the state of California. 37. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and such counterparts shall constitute but one and the same instrument. 38. Binding Effect. It is intended and determined that the provisions of this Agreement shall constitute covenants which shall run with the land comprising the Property for the benefit thereof - 82 - and that the burdens and benefits thereof shall bind and inure to the benefit of all successors-in-interest to the parties hereto. 39. Aqreement to Cooperate. In the event of any legal action instituted by a third party or other governmental entity or official challenging the validity of any provision of this Agreement, the parties hereby agree to cooperate in defending said action: provided, however, each party shall retain the right to pursue its own independent legal defense. 40. state Mandated Revisions. In the event that any applicable state agency or commission requires revisions to this Agreement or the Project Plans as a condition to granting any state approvals, permits or consents which Developer may be required to obtain under this Agreement or the DDA, the City shall review and not unreasonably withhold or delay its consent to such revisions: provided, however, the City shall have no obligation to approve any revisions which would: (i) increase the maximum Floor Area of the Hotel and the Community Center, the Building Height set forth in section 3(c) of this Agreement or the maximum parcel coverage set forth in Section 3 (d) of this Agreement or (ii) decrease the Developer's obligations pursuant to this Agreement. 41. No Third Party Beneficiary. Nothing in this Agreement shall create any rights, as a third party beneficiary or otherwise, in any person or entity not a party to this Agreement: provided, however, any member of the general public shall have the right to enforce Sections 43 and 44. - 83 - 42. Limitation on Developer r s Riqht of Enforcement. Developer recognizes and acknowledges that the provisions of Sections 43 and 44 of this Agreement are solely for the benefit of members of the general public. Developer hereby waives any and all rights which it may presently have or acquire in the future to enforce the provisions of sections 43 and 44 of this Agreement. 43. Revenue Targetinq. For the first ten (10) years following the Commencement Date (as defined in the Ground Lease), the city shall deposit all Base Rent and Percentage Rent (as defined in the Ground Lease) received by the City under the Ground Lease into the city's Beach Fund to be used for any operational, maintenance and capital expenditures for the Santa Monica State Beach for which Beach Fund revenues may be utilized under state law. In connection with any capital expenditures of Beach Fund revenues received by the city under the Ground Lease, which are permitted under state law, the City shall give high priority to the construction of five ( 5 ) paddle tennis courts for use by the general public to be located on Santa Monica state Beach, and shall additionally consider and evaluate all capital projects to be identified through the improvement plan for the Santa Monica State Beach which is being prepared by POD/Sasaki for submission to the city council for its review and approval. 44. Transient Occupancy Tax:. For the first ten (10) years of the operation of the Hotel, the city shall appropriate the transient occupancy tax collected on the Hotel pursuant to Santa - 84 - Monica Municipal Code Section 6600 et seq. and any successor thereto in the following manner: 44 (a) Twenty-five percent (25%) shall be appropriated by the City each year for unrestricted use by the Santa Monica Bay Restoration Project or a similar organization or dedicated fund pertaining to the restoration of Santa Monica Bay. 44 (b) Twenty-five percent (25%) shall be appropriated by the City each year for maintenance, security and capital improvements in parks located in the City. 44 (c) Twenty-five percent (25%) shall be appropriated by the city each year in the annual city budget to reimburse the School District for costs associated with student recreational, artistic and athletic costs, including, without limitation, staff, materials and transportation costs. The School District shall spend at least twenty-five percent (25%) of this sum to pay for costs associated with School District programs and events located at the Community Center. All other funds not so expended shall be used by the School District in its sole and absolute discretion to pay for student recreational, artistic and athletic costs associated with operation of the School District. 44 (d) The ten (10) year limit on all annual transient occupancy tax allocations under this section 44, may be extended by a majority vote of the City Council. - 85 - 45. Voter Approval. This Agreement shall automatically become effective, and the rights and obligations of the city and Developer hereunder shall fully and automatically vest, no later than thirty (30) days after the Adoption Date pursuant to California Elections Code section 4050. As discussed in Section 12 above, development of the Property and the Project shall not be governed by any Subsequent Code Changes, including but not limited to any land use initiatives which may be adopted by the City's electorate after the Adoption Date, such as the "Save Our Beachll and "Santa Monicans for a Livable Environment" Intiatives. Notwi thstanding the foregoing, the City Council shall place on the November 6, 1990 Regular Municipal Election ballot a measure pursuant to California Elections Code Section 4017 calling for a direct vote by the city's electorate on the Project. This measure shall pose the following question to the voters: Shall the ordinance approving the Development Agreement between the City of Santa Monica and Pacific Beach Development Limited Partnership for development of a hotel and public community center at 415 Pacific Coast Highway be repealed by the people of the City of Santa Monica? If the above council-sponsored measure is approved by a majority vote at the November 6, 1990 Regular Municipal Election, then this Agreement shall thereupon automatically and immediately terminate and be of no further force or effect. - 86 - IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. CITY: CITY OF SANTA MONICA: By: JOHN JALILI Its City Manager ATTEST: City Clerk APPROVED AS TO FORM: Robert M. Myers, city Attorney DEVELOPER: PACIFIC BEACH DEVELOPMENT LIMITED PARTNERSHIP, a California limited partnership By: PACIFIC BEACH DEVELOPMENT CORPORATION, a California corporation Its sole General Partner By: MICHAEL L. McCARTY President of PACIFIC BEACH DEVELOPMENT CORPORATION RAL: ncv: Rl12-u02.223 lnm:08/02t90 - 87 - EXHIBIT uA" DEVELOPMENT AGREEMENT between THE CITY OF SANTA MONICA and SANTA MONICA BEACH DEVELOPMENT LIMITED PARTNERSHIP Leqal Descrintion of the ProDertv PARCEL 1: THAT PORTION OF THE RANCHO BOCA DE SANTA MONICA, IN THE CITY OF SANTA MONICA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE SOUTHWESTERLY LINE OF THE 20 FOOT STRIP OF LAND CONVEYED TO THE CITY OF SANTA MONICA, FOR ROAD PURPOSES BY DEED RECORDED IN BOOK 4530 PAGE 152 OF DEEDS, RECORDS OF SAID COUNTY, DISTANT NORTHWESTERLY 2045 FEET FROM THE INTERSECTION OF SAID SOUTHWESTERLY LINE WITH THE SOUTHWESTERLY PROLONGATION OF THE NORTHWESTERLY LINE OF MONTANA AVENUE, AS SAID AVENUE IS SHOWN ON MAP OF THE CITY OF SANTA MONICA, RECORDED IN BOOK J 9 PAGES 45 THROUGH 51 INCLUSIVE OF MISCET.T~EOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY: THENCE NORTHWESTERLY ALONG THE SOUTHWESTERLY LINE OF SAID 20 FOOT STRIP OF LAND, 30 FEET, THENCE SOUTHWESTERLY AT RIGHT ANGLES, TO SAID SOUTHWESTERLY LINE, 190 FEET TO THE LAND DESCRIBED AS THE LINE OF MEAN HIGH TIDE OF THE PACIFIC OCEAN, IN ORDINANCE NO. 188 (COMMISSIONER'S SERIES) OF THE CITY OF SANTA MONICA, ENTITLED "AN ORDINANCE FIXING AND DETERMINING THE LINE OF MEAN HIGH TIDE OF THE PACIFIC OCEAN, IN THE CITY OF SANTA MONICA," ADOPTED JULY 25, 1921 AND RECORDED IN BOOK 431 PAGE 90, OFFICIAL RECORDS OF SAID COUNTY; THENCE SOUTHEASTERLY ALONG THE SAID LAST MENTIONED LINE, 30 FEET; THENCE NORTHEASTERLY, 190 FEET TO THE POINT OF BEGINNING. PARCEL 2: THAT PORTION OF THE RANCHO BOCA DE SANTA MONICA, IN THE CITY OF SANTA MONICA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE SOUTHWESTERLY LINE OF THE 20 FOOT STRIP OF LAND CONVEYED TO THE CITY OF SANTA MONICA, FOR ROAD PURPOSES BY DEED RECORDED IN BOOK 4530 PAGE 152 OF DEEDS, RECORDS OF SAID COUNTY, DISTANT NORTHWESTERLY 2075 FEET FROM THE INTERSECTION OF SAID SOUTHWESTERLY LINE WITH THE SOUTHWESTERLY PROLONGATION OF THE NORTHWESTERLY LINE OF MONTANA AVENUE, AS SAID AVENUE IS SHOWN ON MAP OF THE CITY OF SANTA MONICA, RECORDED IN BOOK 39 PAGES 45 THROUGH 51 INCLUSIVE OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE EXHIBIT A PAGE 1 OF 3 COUNTY RECORDER OF SAID COUNTY: THENCE NORTHWESTERLY ALONG SAID SOUTHWESTERLY LINE OF SAID 20 FOOT STRIP OF LAND 30 FEET; THENCE SOUTHWESTERLY, AT RIGHT ANGLES TO SAID SOUTHWESTERLY LINE, 190 FEET TO THE LINE DESCRIBED IN THE LINE OF MEAN HIGH TIDE OF THE PACIFIC OCEAN IN ORDINANCE NO. 188, (COMMISSIONER'S SERIES) OF THE CITY OF SAND MONICA, ENTITLED If AN ORDINANCE FIXING AND DETERMINING THE LINE OF MEAN HIGH TIDE OF THE PACIFIC OCEAN, IN THE CITY OF SANTA MONICA" ADOPTED JULY 25, 1921 AND RECORDED IN BOOK 431 PAGE 90, OFFICIAL RECORDS OF SAID COUNTY, THENCE SOUTHWESTERLY ALONG THE SAID LAST MENTIONED LINE, 30 FEET, THENCE NORTHEASTERLY 190 FEET TO THE POINT OF BEGINNING. PARCEL 3: THAT PORTION OF THE RANCHO BOCA DE SANTA MONICA, IN THE CITY OF SANTA MONICA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE SOUTHWESTERLY LINE OF THE 20 FOOT STRIP OF LAND CONVEYED TO THE CITY OF SANTA MONICA, FOR ROAD PURPOSES, BY DEED RECORDED IN BOOK 4530 PAGE 152, OF DEEDS, RECORDS OF SAID COUNTY, DISTANT THEREON NORTHWESTERLY 2105.00 FEET FROM ITS INTERSECTION WITH THE PRODUCED NORTHWESTERLY LINE OF MONTANA AVENUE, AS PER MAP OF THE CITY OF SANTA MONICA, RECORDED IN BOOK 39 PAGES 50 AND 51 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, THENCE NORTHWESTERLY ALONG SAID SOUTHWESTERLY LINE, 60.00 FEET: THENCE SOUTHWESTERLY, AT RIGHT ANGLES TO SAID SOUTHWESTERLY LINE, 190 FEET TO THE LINE DESCRIBED AS THE LINE OF MEAN HIGH TIDE OF THE PACIFIC OCEAN, IN ORDINANCE NO. 188 (COMMISSIONER'S SERIES) OF THE CITY OF SANTA MONICA, ENTITLED rt AN ORDINANCE FIXING AND DETERMINING THE LINE OF MEAN HIGH TIDE OF THE PACIFIC OCEAN, IN THE CITY OF SANTA MONICA" ADOPTED JULY 25, 1921 AND RECORDED IN BOOK 431 PAGE 90, OFFICIAL RECORDS OF SAID COUNTY, THENCE SOUTHEASTERLY ALONG THE SAID LAST MENTIONED LINE, 60.00 FEET, THENCE NORTHEASTERLY, 190 FEET TO THE POINT OF BEGINNING. PARCEL 4: THOSE PORTIONS OF THE RANCHO SAN VICENTE Y SANTA MONICA, AND OF THE RANCHO BOCA DE SANTA MONICA, IN THE CITY OF SANTA MONICA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE SOUTHWESTERLY LINE OF THE 20 FOOT STRIP OF LAND CONVEYED TO THE CITY OF SANTA MONICA, FOR ROAD PURPOSES, BY DEED RECORDED IN BOOK 4530 PAGE 152 OF DEEDS, RECORDS OF SAID COUNTY, DISTANT THEREON NORTHWESTERLY 1415 FEET FROM ITS INTERSECTION WITH THE PRODUCED NORTHWESTERLY LINE OF MONTANA AVENUE, AS SHOWN ON THE MAP OF THE TOWN OF SANTA MONICA, RECORDED IN BOOK 39 PAGES 50 AND 51 OF MISCELLANEOUS RECORDS, IN THE OFFICE EXHIBIT A PAGE 2 OF 3 OF THE COUNTY RECORDER OF SAID COUNTY; THENCE NORTHWESTERLY ALONG SAID SOUTHWESTERLY LINE, 630 FEET; THENCE SOUTHWESTERLY ALONG A LINE, AT RIGHT ANGLES, TO SAID SOUTHWESTERLY LINE, 1.90 FEET TO THE LINE DESCRIBED AS THE LINE OF MEAN HIGH TIDE OF THE PACIFIC OCEAN, IN ORDINANCE NO. 188, (COMMISSIONER'S SERIES) OF THE CITY OF SANTA MONICA, ENTITLED "AN ORDINANCE FIXING AND DETERMINING THE LINE OF MEAN HIGH TIDE OF THE PACIFIC OCEAN, IN THE CITY OF SANTA MONICA," ADOPTED JULY 25, 1921 AND RECORDED IN BOOK 431 PAGE 90, OFFICIAL RECORDS OF SAID COUNTY, THENCE SOUTHEASTERLY ALONG SAID LAST MENTIONED LINE, 612.75 FEET TO A RADIAL LINE OF THE CURVED SOUTHWESTERLY LINE OF SAID 20 FOOT STRIP OF LAND, WHICH PASSES THROUGH THE POINT OF BEGINNING, THENCE NORTHEASTERLY 190 FEET TO THE POINT OF BEGINNING. 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W () : III pO .. - oC ::~; 010:: _oC.c ~~ z w cO o G1..: ~ ... < ~ < 0 ~ +- i 0 z 0 ~ 'I( ~ : II) ~ - ; ..;~.:: .... - - I --.--- -.- -.------ --... t..! L...: ....Y III 4: :r l- I- ~ CIl " , f . ~ I I! ~ ! I _I .. : W ::I: ~ ..... ..J Ii: a: ... ~ '" o z i o .. tr ':) ::i Si " .. EXHIBIT "CII DEVELOPMENT AGREEMENT between THE CITY OF SANTA MONICA and SANTA MONICA BEACH DEVELOPMENT LIMITED PARTNERSHIP Mitiaation Measures Earth ~ A comprehensive geotechnical report shall be prepared specifically for the Property which includes provisions for excavation and the correction of potential geologic hazards. Such report shall also include an analysis of the bluff immediately northeast of the Property to assess its factors of safety against gross and surficial failure, and to recommend appropriate setback distances if indicated. . During construction, all grading will be carefully observed, mapped and tested by the ProJect eng~neer. All grad~ng will be performed under the supervislon of a licensed engineering geologist and/or soils eng~neer ~n accordance with applicable provisions of the Santa Monica Municipal Code to the satisfaction of the City Bu~lding and Safety Department. . The Project shall be des~gned and constructed in compliance with all applicable specifications of the building codes and regulations of the City of Santa Monica, During Project construction, liquefaction potential shall be eliminated to the satisfaction of the City Building and Safety Division. Examples of measures to mitigate liquefaction include excavation and recompaction of soil materials, soil treatment with dynamic compaction, installation of dewatering devices to relieve pore pressure, grout injection, or installation of reinforclng stone columns. · Prior to the Project construction, dewatering and pumping techniques for both the upper unconfined aqulfer and lower confined aquifer shall be approved by the City Building and Safety Divlsion. Air ouality · The California Health and Safety Code requlres that mitigation measures be undertaken to minimize dust generation. Construction-related dust emissions shall be reduced approximately 50 percent by watering exposed surfaces durIng clearing, grading, earthmoving and other site preparation activities. Short-term impacts due to grading and construction equipment could be minimlzed by the following measures. These measures shall be established as conditions of Project approval and contalned in all applicable contracts between Developer and contractors. - 2 - Ground wetting shall be required (SCAQMD Rule 403 for dust control) during grading and construction. Contractors will water expose surfaces in late morning and at the end of the day. The frequency of watering will increase if wind speeds exceed 15 mph, Contractors shall cover any stockpiles of soil, sand and similar material. Construct1on equipment shall be shut off to reduce 1d11ng when not in direct use. Low sulfur fuel shall be used for construction equipment, Contractors will discontinue construction activities during second stage smog alerts within the Northwest Coastal area as identified by the South Coast Air Quality Management District, or if such designation ceases to exist, another area of similar S1ze and location. Any stock piles of excavated soil shall be located at least 50 feet adjacent residential property. Loading of haul trucks shall take place at least 50 feet from the north or south Property lines of the Property. - 3 - · Construction of temporary barriers and screening of at least eight (8) feet in height shall be erected to eliminate the adverse effects of windblown excavated matter. · Prior to issuance of demolition permits, Developer is required to certLfy that should asbestos be found in existing structures, a licensed certified contractor specia11z1ng in asbestos removal shall perform the required work in accordance with California OSHA standards. The project shall comply with SCAQMD's Regulation 15, adopted December 11, 1987, Vents for all subterranean parking facilities shall be located at least 50 feet from adJacent residential property, Where feasible, the location of the vents shall take into account the predominant prevailing wind direction to minimize impacts on adjacent residences, Vents for all kitchen areas shall be located as far away as possible from adjacent residential property. Where feasible, the location of the vents shall take into account the predominant prevailing wind direction to minimize impacts on adJacent residences. A charcoal or similar air f1ltration system will be required to remove odors from a1r vents. Vents for the Hotel Restaurant shall be located on the top of the Hotel roof. Vents for the Beach Cafe shall be located on the - 4 - south side of the North House away from the residentlal area and as high up on the North House facade as can be accommodated within historic preservation practices. · All fireplace chimneys shall be equipped with spark inhibitors, Fireplace designs shall be of a type that facilitates fast burn rates and high intensity flames, particularly through the use of hearth insert type equipment, water/Hydrology · High points in pavement grade shall be designed to prevent runoff from the Property and Pacific Coast Highway from entering the underground parking facility. · Project drainage shall be graded directly toward the beach or to local catch basins where non-closable grate drains shall be placed. · Grate openings shall be of a size to accommodate 1,5 times the amount of water that the outflow pipe can convey, The outflow pipe shall be composed of polyvinyl chloride ("PVC") or other non-caustic pipe, · If the PVC-type pipe is exposed to additional weight or load, the pipe shall be encased to prevent failure. The outlets for - 5 - drainage pipes shall include a rock or concrete splash dissipator pad to prevent scouring, The proj ect drainage plan shall be submi tted to the City Engineer for review and approval, prior to development of any drainage improvements. Any proposed drainage improvements shall be developed to the satisfaction of the City Engineer and shall meet applicable requirements from other responsible agencies, Noise A construction period mitigation plan shall be prepared by Developer for approval by the Department of General services prior to the issuance of a building permit, As applicable this plan shall: Specify the names, addresses, telephone numbers and business license numbers of all contractors and sub- contractors as well as Developer and the architect; Describe how demolition of any existing structures 15 to be accomplished; - 6 - Specify the specific types of equipment to be used and their approximate location. Locations for compressors and pumps should be specifically located, Indicate where any cranes are to be located for erection/construction: Describe how much of the public street, alleyway or sidewalk is proposed to be used in conjunction with construction: Set forth the extent and nature of any pile-drlv~ng operations: Describe the length and number of any tiebacks which must extend under the Property of other persons: Specify the nature and extent of any dewatering and its effects on adjacent buildings: Describe anticipated construction-related truck routes, number of truck trips, hours of haullng and parking location; Specify the nature and extent of any helicopter hauling: - 7 - state whether any construction activity is proposed beyond hours normally permitted for such activity under the applicable Santa Monica Noise Ordinance~ Describe any proposed construction noise mitigatlon measures. Describe construction period security measures, including any fencing, lighting and security personnel~ Provide a drainage plan; Provide a construction period parking plan which shall minimize use of public streets for parking: List a designated on-site construction manager~ A sign shall be posted on the Property in a manner consistent with the publlC hearing sign requlrements which shall identify the address and phone number of Developer for the purposes of responding to questions and complaints during the constructlon period. said sign shall also indicate the hours of perrnlss1ble construction work. A copy of the construction mltigation conditions shall be posted in an easily vlsible and accessible locat~on - 8 - at all times during construction on the Property, The pages of the copy of construction mitigation conditions shall be laminated or otherwise protected to ensure durability of the copy. · The Project shall comply with applicable city noise regulations specified in the Santa Monica Noise Ordinances (Santa Monica Municipal Code Chapter 3A, Ordinance Numbers 1406 CCS and 1458 CCS). During construction, the Project contractors shall muffle and shield intakes and exhaust, shroud and shield impact tools, and use electric-powered rather than diesel-powered construction equipment, as feasible. Temporary walls and noise barriers shall be placed around the Property and/or locations of noisy activities to block and deflect the noise from the adjacent residential properties. Developer shall use a plle drill~ng wlth tie-down anchor method to minimize noise ~mpacts, Where construction is taking place directly adj acent to a residential property, portable noise curtains or panels to contain noise from powered tools such as impact wrenches shall be used. - 9 - Truck deliveries and trash pickups shall be prohibited between the hours of 7:00 P.M. and 7:00 A.M. · The level of noise from rooftop mechanical equipment shall conform to the provisions of the Santa Monica Noise Ord~nance for Zone I. Should the equipment exceed the Noise Ordinance thresholds (i.e, a median noise level of 50 DBA from 10 pm to 12 am and 60 DBA from 7 am to 10 pm) at the Property line, then the rooftop mechanical equipment shall be fully enclosed or partially enclosed (depending on the equipment) in a manner that will achieve the Zone I noise levels at the Property line. · Parking garage ramp surfaces shall be of the type to minimize the potential for tire squeal. · windows and walls on the north side of the Community Center shall have a sound transMlssion class rating sufficient to eliminate the transmission of any loud or amplified sounds exceeding the sound level limits established in the City of Santa Monica Noise Ordinance for Noise Zone I, An 8-foot wall shall be constructed along the northern Property line, or other n01se attention measures should be implemented, to reduce sounds from the outdoor dining area of the Beach Cafe and from the Children's Play Area, should these activities remain in their present location. - 10 - - All state and local standards for exterior and interior noise exposure shall be met for the Project. Prior to issuing building permits, Developer shall submit evidence, to the satisfaction of the City, that all Project land uses will meet applicable exterior and interior noise standards. If determined necessary by the City, Developer may be requlred to prepare a detailed acoustical assessment indicating mitigation measures necessary to achieve acceptable exterior and lnterior noise levels on-slte, to the satisfaction of the City, Liqht and Glare · Developer shall prepare a lighting and building materials plan for approval by the city's Architectural Review Board, project lighting and building materials shall be built and/or installed in accordance with City of Santa Monica ordlnances, standards and applicable requirements, Measures to reduce adverse light and glare impacts to acceptable levels lnclude the following: Where appropriate, the Project shall utilize lightly tinted glass to decrease reflectivity and to reduce the emission of ambient interior light. - 11 - Exterior surfaces shall be of a color, material, and texture to reduce daytime glare, Foliage and landscaping shall be placed wherever possible to limit exposure to Project lighting and to decrease the reflectivity of surfaces. Outdoor lighting shall be shielded and directed on-site and downward. Outdoor lighting shall be reduced or softened after peak hours, especially in the areas of the Hotel Pool, the garden areas of the Hotel and Community Center and the outdoor dining areas of the Hotel Restaurant and the Beach Cafe. Outdoor lighting of the Hotel and the Community Center shall be restricted to security lighting between the hours of 12: 00 AM and 6: 00 AM. Identification signs for the ProJect shall be restricted to the Project I s eastern facade along Pacific Coast Highway with the exception of signage along the beachside that may be necessary for the community Center and the PubllC Beach Facillty. Consideration should be given to reduction or ellmination of visible illumination sources from the Projects. northern and southern facades. Restrictions on lighting emitted from the southern facade of the Project should be requ1red as part of - 12 - conditions of approval of the Project. Light emltted from the northern facade should be shaded (by window treatment) or otherwise obstructed with landscaping along northern walls. Shade/Shadow No measures are necessary or recommended to mitigate shadow impacts. Employment, Housing and population No mitigation measures are recommended for employment, population or housing impacts as no significant adverse impacts are anticipated, Land Use · The project shall include the planting area along the northern Property line as set forth in Section 3(g) of the Development Agreement, and maintain the building setback along the north Property line. No outslde actlvities shall be allowed wlthln the north slde yard setback. Riqht-of-way and Access - 13 - Developer shall closely coordinate final design plans with the City's Traffic Engineer to insure that no unacceptable access or on-site circulation impacts occur. · In order to safely accommodate left-turn movements from northbound Pacific Coast Highway into the project, a left-turn storage lane serving the Project access way shall be striped within the existing painted median on Pacific Coast Highway, subject to the Developer obtaining all requisite permits and approvals from the State Department of Transportation ("CalTransll) and any other applicable governmental agencies. · Access to the beach areas would be improved for handicapped and elderly beach users by the installation of a plank boardwalk from the Property to the beach area in accordance with the requirements of Title 24 of California Code of Regulations, Portions of the bike path shall be resited and reconstructed by Developer to accommodate the needs of the proj ect and bicyclists. Developer shall comply with all State and City standards, codes and ordinances in the provision of access and parking to the general public, the handicapped and Hotel guests. - 14 - · Vehicular access would be improved and made safer with the installation of a traffic signal adjacent to the entranceway to the proposed Project. Subject to the Developer obtaining all requisite permits and approvals from CalTrans and any other applicable governmental agencies, an acceleration lane shall be provided in accordance with CalTrans specifications in the event a signal is not installed at the Project access point onto Pacific Coast Highway, Appropriate signage shall be installed to prevent pedestrian crossing from the east side of Pacific Coast Highway. Such legally-permitted pedestrian crossings would not be desirable given the proposed signalization of the Project driveway, its synchronization with signalized intersect10ns along Pacific Coast Highway, and the desire to maintain smooth traffic flow on Pacific Coast Highway. Subj ect to Developer obtaining all requisi te perm~ ts and approvals from CalTrans and any other applicable governmental agencies, the Project driveway shall be widened to provide two outbound lanes; one exclusive left-turn lane and one exclusive right-turn lane. A minimum of 30 feet is necessary to accommodate both outbound lanes and inbound lanes. Subject to Developer obtaining all requisite penuts and approvals from CalTrans and any other applicable governmental agencies, A prec~se s1gnal coordination plan shall be prepared - 15 - and implemented at the time of design and installation of the proposed signal at the Project access point onto Pacific Coast Highway. This plan shall include synchronizing the Pacific Coast Highway signals at Channel/Entrada/Chautauqua, the Project driveway and the California Incline. The plan shall be based on and tailored to the actual traffic volumes existing at that time. All costs of the plan preparation and implementation shall be borne by the Developer. Public Access Because no adverse public access impacts are anticipated, no Project-specific mitigation measures are required. Traffic and Parkinq · Subject to Developer obtaining all requisite permits and approvals from CalTrans and any other applicable governmental agencies, a three-phase traffic signal shall be installed at the proj ect access point onto Pacific Coast Highway I with protected left-turn phasing for left-turns from northbound Pacific Coast Hlghway ~nto the Project. Costs for implementation of such measures shall be borne by Developer. Subject to Developer obtaining all requisite permits and approvals from CalTrans and any other applicable governmental agencies, an acceleratlon lane shall be provided ~n accordance with CalTrans specifications in the event a signal is not - 16 - installed at the Project access point onto Pacific Coast Highway, The Project shall implement a Transportation Demand Management program to reduce Project-generated traffic. No Hotel Restaurant employee shall be required or allowed to report to work during the week between the hours of 3: 30 p. m. to 6:30 p.m. Developer shall provide sufficient parking to meet the peak parking demand of the proposed uses and shall replace the 176 existing beach parking lot spaces. Developer shall establish preferential parking locations in the Subterranean Parking Area for vanpools and carpools. Developer shall establish and operate a ride-sharing program for Project employees. Appropriate signage shall be posted by the Developer on the Project advising Project employees of this program. · Service deliveries to the Project shall not be permitted daily during the hours of 7:]0 a.m, to 9:30 a.m. and 4:00 p.m. to 6:00 p.m. Developer shall include in written materials for the Banquet Faci11ties and Hotel Meeting Rooms recommendat1ons that - 17 - potential users maximize vehicle occupancy. To mitigate parking and traffic impacts, the Developer shall comply with the following conditions within six (6) months of issuance of a certificate of Occupancy for the Hotel: Arrange for appropriate van or bus service to and from Los Angeles International Airport for Hotel guests, Provide local public transit displays at the Project identifying routes and schedules along with promotlonal information concerning destinatlons within walking/transit/biking distance of the Project. Prov ide maps, at no cost to Hotel guests, locations of restaurants, shopping areas, facilities, and pier activities, that can be easily from the Project by walking. showing beach reached Provide a shuttle system serving the major areas of Hotel user destinatlons in the City, The shuttle route shall be set by the City and include downtown Santa Monica, Santa Monica Pier, Main Street and the Hotel. The shuttle shall be available for use by Hotel guests and the general pUblic, and shall operate on a schedule established by the City for at least eight hours dally, with the understanding that the eight-hour mlnimum period - 18 - can be broken into two (2) parts to coincide with peak Hotel demand. The shuttle vehicle shall have a distinctive character that would tend to promote tourism in general. The shuttle bus shall begin operation when the Hotel reaches an initial seventy percent (70%) occupancy rate for three (3) consecutive months, or within two (2) years from issuance of the Certificate of Occupancy, whichever is sooner. The City shall consider requirements that future overnight visitor accommodations join in supporting a similar shuttle system with shared expenses, Developer may sat1sfy its obligat1on under this paragraph by participating in a shuttle system operated by or on behalf of other overnight visitor accommodations in the City so long as such shuttle service meets all of the requirements of this paragraph, In lieu of requiring the Developer to provide shuttle service under this paragraph, the City reserves the right to unilaterally require annual payment by Developer to the City of an equitable portion of the annual operating costs (including replacement reserves and depreciation) of a City-sponsored shuttle system in the City, provided that any such system must satisfy all of the requirements of this paragraph and the annual payment to the City by the Developer must not exceed the annual cost to Developer of providing its own shuttle service, - 19 - Meeting/banquet schedules shall be regulated to group sizes that can be accommodated within on-site parking capacity. utilities WATER · In accordance with the requirements of all applicable City Ordinances, Developer shall incorporate water saving devices and techniques into the design and operation of the Project. Water conservation measures include, but are not limited to, the following: Installation of ultra low-flow toilet fixtures using no more than 1.6 gallons per flush. Installation of low-flow showerheads using no more than 3.0 gallons per minute, Landscaping with water conservative/drought-tolerant species (lIxeriscapell). Developer shall install a water recycling system with~n the laundry facil1ties of the Hotel. provisions for meeting fire flow requirements and any improvements to on-site water lines shall be incorporated into - 20 - the final Project design prior to issuance of a bUlld1.ng permit. Improvement costs shall be borne by Developer. SEWER · Developer shall comply with the provisions of current or future ordinances regarding sewer capacity allotment in the City of Santa Monica. · Prior to issuance of a certificate of occupancy, Developer shall present documentatlon to the General SerV1.ces Department certifying that existing Santa Monlca occupancies with toilets installed prior to 1978 have been retrofitted with ultra low- flow toilets (1.6 gallons or less per flush) such that development of the Project will not result in a net increase in wastewater flows. Flow from existing occupancies which will be removed as part of the new development may be deducted from flow attributable to the new development. Flow calculations for new development and existing occupancies shall be consistent with guidelines developed by the General Services Department. Developer will be required to pay a sewerage facilities charge to the City before a permit can be issued to connect to the sewer pursuant to Sect10n 7190 of Ord1nance 1451. SOLID WASTE - 21 - - Developer shall participate in the program in effect on the Adoption available to commercial developments limited to, the following: Santa Monica Recycle Date. The programs include, but are not Trash bins should be segregated with regard to recyclable or non-recyclable designation. Glass and newspapers should be further segregated from the Project's waste stream, for eventual collection by municipal employees. Nothing in this provision is intended to limit or excuse compliance by Developer with any Subsequent Code Changes adopted by the City related to solid waste disposal, · Trash receptacles sufficient in size and number to contain the trash generated by the uses of the Project shall be provided, Outdoor trash receptacles must be shielded from general public view on at least three sides by impact-resistant walls on three sides not less than five or more than eight feet in height, and by an impact reslstant gate of not less than flve and not more than eight feet. COMMUNICATIONS - 22 - · Beyond compliance Wl.th Section 4, Subsection 7166 of the Santa Monica Municipal Code, requiring underground installation of commercial project cables, no mitigation measures for communication system impacts are recommended. The Project sponsor shall contact GTE's office of Service Planning in order to determine additional infrastructure or facilities needs and to coordinate the timing of the required telephone service. Public Services FIRE PROTECTION · Unless otherwise mitigated through design solutions reviewed and approved by the Fire Department, no building or portion of a building shall be constructed more than 150 feet from the edge of a roadway of an improved street, access road or designated fire lane. Unless otherwise mitigated through design solutions reviewed and approved by the Fire Department, the entrance or exit of all ground floor units shall not be more than 150 feet from the edge of an access road or designated fire lane. Fire hydrants shall be located on-site, Their number and location will be determined after the Fire Department reviews definitive Project plans and specifications. - 23 - A wet standpipe water distribution system shall be installed throughout the Project. · Fully automatic sprinkler systems shall be installed throughout all ProJect structures. · Fixed extinguishing systems shall be installed in restaurant and kitchen areas. Automatic fire alarm systems shall be installed throughout all Project structures. · Improvements to the water system as may be required to provide necessary fire-flow to the Project, Any necessary improvements shall be provided at the expense of Developer. Developer shall contact the City of Santa Monica Department of General Services and the Fire Department to determine required f1re-flow and specific water rna1n 1mprovements. · The Project shall comply with all applicable state and local fire ordinances. · Definitive Project plans and specifications shall be submitted to the Fire Department, and requirements shall be satisfied prior to issuance of a building permit. - 24 - POLICE PROTECTION · Public spaces, such as hallways, elevators, and entrances shall be designed to prevent areas of concealment. · Adequate lighting levels shall be provided for the Hotel perimeter and adjacent beach frontage. Such lighting, however, shall be designed to minimize illumination impacts on surrounding land uses. Hotel guests shall be informed of beach safety guidelines, use of emergency telephone numbers and telephone extensions of the security department. Signage notifying Community Center users of similarly available security procedures shall be provided in the Community Center, A system shall be established to enable Hotel staff to rekey entrylocks whenever a key is lost, rendering previous keys useless. Developer shall meet with the Police Department for security design assistance. Prior to issuance of a building permit, Developer shall prepare and the Pol~ce Department shall approve a security plan for the Project. Upon completion of the Project, Developer shall provide the Police Department with a des~gn of the ProJect, The diagram - 25 - shall include access routes, Hotel unit numbers, and any information that might facilitate police response. STREET MAINTENANCE - City streets impacted by construction activities shall be rehabilitated as necessary to the satisfaction of the city's General Services Department. Rehabilitation costs shall be borne by Developer. Enerqy ELECTRICITY - The Project shall conform to Title 24, Article 2 of the California Code of Regulations. This Article concerns energy conservation standards for new residential and nonresidential buildings, and provides guidelines on heating and coollng design, water heating and cooling design, water heatlng, electrical dlstribution, lighting and other forms of energy consumption. Buildings constructed as part of the Project would be required to comply with the regulations 1n force at the time of the application for the necessary buildlng permits. . Developer shall prepare support energy analyses of all bUl1ding deslgns as part of the Project, and conslder all economically attractive conservation measures for lnclusion - 26 - in the project. Unnecessary consumption of energy during construction, operation and maintenance shall be avoided; siting orientation and design should be done so that energy consumption is minimized: and reduction of peak energy demand, use of alternative or renewable fuels, and recycling should all be encouraged, · Toplighting and sidelighting should be considered for their potential energy savings and if feasible, shall be incorporated into building design as an effect1ve means of utilizing sunlight to reduce energy consumption. Toplight1ng involves installation of clear or translucent windows as an integral part of new building roof construction, High performance glass or double glazing shall be 1nstalled to minimize heat gain and loss. Effective sidelighting requires strategic choice in size, shape, number and orientation of windows. Lighting controls shall be installed in the Project and shall incorporate an automatic control system for adjusting the lighting level of electric lights. Such controls shall act to sense the measure of daylight and accordingly shall adJust lights to appropriate levels, Motion sensor-controlled lighting shall be installed in the Project, where feasible, - 27 - · Energy saving lamps shall be installed in building operations support rooms, such as the kitchen pantry, NATURAL GAS · New building design and construction shall conform to energy conservation standards specified in Title 24 of the California Administrative Code. Developer is required to comply with state standards through implementation of one of the following measures: incorporation of a set of energy conserv1ng design features, specification of maximum energy consumption limits for designated building uses, or the use of non-depletable energy resources, Fiscal Impact.s Because the Project provides a net fiscal benefit to the City of Santa Monica, no mitigation measures are recommended. Recreation The City shall increase the personnel and equipment required to maintain the beachfront adJacent to the Project, if beach- going activity increases sUfficiently to require it. The ProJect shall include appropriate signage along w1th the beach and in and around the Communlty Center to not1fy beach - 28 - visitors that the changing rooms and public restrooms in the Public Beach Facility are intended for public use. Prior to its approval by the City of Santa Monica and the California Coastal Commission, a signage program shall be reviewed by the Los Angeles county Department of Beaches and Harbors. Public parking lot #530, located at 530 Pacific Coast Highway (south of the project site) shall be striped and its entrance gate relocated to allow lifeguard and paramedic access to the beach, after such time as Developer obtains all permits and approvals required for such work from the applicable governmental agencies. CUltural/Historical Resources Prior to commencement of construction of the Project, Developer shall prepare a detailed plan for review by the Clty of Santa Monica discussing the relocation of the North House, Such plan shall include proposed relocation techniques, rehabilitation measures, and a demonstration of appropriate liability insurance. · To the extent feasible and consistent with public access and Project design obJectives, the Project shall conform to the "Secretary of the Interior's Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings, " Such conformance shall include a ProJect design which 15 - 29 - historically and architecturally compatible with the existing North House, and shall include preservation of the North House's interior and exterior historic fabric, with regard to the preservat~on of the North House, economic considerations shall not influence the feasibil~ty or renovation under the Secretary of Interior Guidelines without approval of the Zoning Administrator. The Project shall comply with the specific requirements imposed as a result of an issuance of a Certificate of Appropriateness with respect to historical preservation, The North House shall be moved in one piece, and shall be adequately secured and protected to reduce damage to its interior and exterior. Should it be determined the North House cannot be moved in one place, the City I S Landmarks Commission shall review an alternative approach, The Developer shall acquire appropriate liability insurance to insure the North House from inadvertent damage or destruction as a result of its relocation. Tiles from the existing pool shall be used if feasible and appropriate in the Hotel Pool, or elsewhere on the Property, · The entire Property shall be photo-documented in its current state before development proceeds. A photograph~c record shall be made of all interior and exterior historic fabrlC if - 30 - preservation is not possible. Any photographic documentation shall be of archival quality and shall be delivered to the City upon completion. A plaque commemorating the Property shall be incorporated into the Project. e The North House exterior shall be restored to its original design consistent with preservation practices approved by the C~tyls Landmarks Commission, A preservation arch1tect shall be present on the Property during the relocat1on of the North House and shall monitor the rehab~litation of the North House, The selection of the preservation architect by Development shall be subject to approval by the Landmarks Commission, which approval shall not be unreasonably withheld or delayed, · Developer shall preserve the following interior elements of the North House structure listed as the "primary historic fabricll. The living room, dining room, entry hall and stalr, The wood flooring of the non-utl11ty areas of the first floor. The wood wainscot and full height paneling WhlCh occurs throughout the non-utility areas of the first floor, - 31 - The doors, windows, casings and associated hardware which is original to the building. The four corner dining room cabinets, surmounted by exquisi te hand-carved shell forms, which are integral extensions of the dining room's paneling. The main stair and entry hall. The Italian marble fireplace ln the livlng room. The ornamental wood ceiling in the guest bathroom. The ornamental tile-work in two upstairs bathrooms. The North House shall be rehabilitated including the reconstruction of the chimney, the return of the porte-cochere to is original configuration, rehabilitation of all facades, the restoration of the shutters on the two first floor windows on the northern facade, and removal of the plywood panels on the west balcony and the restoratlon of the balcony. In addition to the rehabilitation of the original exterior of the North House and the preservation of the interior elements listed above, Developer shall preserve and/or photo document and commemorate the following features: - 32 - The brickwork of the front porch shall be rehabilitated preserving its geometric pattern. Representative panels from the series of mosa~c tile pool panels shall be preserved and incorporated into the rehabilitation and/or construction of the Community Center. The sea water bulkhead and the gate on the east side of the building shall be photo-documented, · During the City's Landmark Commission's review process, the City shall ensure that the new work on the Project is compatible with the North House in terms of size, scale, design, materials, color and texture. · The new construction shall relate to the North House in the following manner. Proportion of openings: Width to height relationships of doors and windows. Rhythm of solids to voids in the facade: Alternat~on of strong and weak elements, - 33 - Architectural details: Continuity of elements such as cornices, arches, balustrades. Scale: Size of building and detail in relationship to people, relationship of building to open space, Aesthetics The Project shall include additional modifications of the proposed building mass and architecture to alter the extent of aesthetic effects. Examples of such mitigation could include creative facade modulations and 1ndentations to break up the wall on the Pacific Coast Highway elevation, During the Project's architectural review approval process, the city shall evaluate building mass, height, materials, colors, and perimeter and exterior interior landscaping, to ensure their appropriateness for their location. Speclal attention shall be given to colors and building materlals to ensure compatibility with surrounding properties. . The Project shall comply with applicable sections of the City's xerlscape ordinance, Miscellaneous - 34 - Developer shall make ava1lable to Project employees bus tokens for the Santa Monica Municipal Bus Lines at one-half (1/2) cost and shall maintain a visible display of public transit information in the Community Center. · Developer shall offer all permanent full-time Project employees a flexible benefit package, including child care benefits, at no cost to the employees. RAL:ncv:RL12CS28.223 06/29/90 - 35 - EXHIBIT "DII DEVELOPMENT AGREEMENT between THE CITY OF SANTA MONICA and SANTA MONICA BEACH DEVELOPMENT LIMITED PARTNERSHIP Requirements of the General Services Department 1. Developer shall construct a paved concrete connection at least 14 feet wide from the Project to the existing beach bikepath as shown in the project Plans. The connection shall be constructed in accordance with the standards which were utilized for construction of the bikepath north of the Santa Monica Pier prior to the Adoption Date. Developer shall also realign the existing beach bikepath as shown in the Project Plans. The Developer shall be responsible for obtaining all necessary permits from the City and State for such modifications to the beach bikepath. There shall be no interruption of use to the existing beach bikepath during construction of the new connection to, and realignment of, the existlng beach bikepath. 2. Developer shall construct a five (5) foot wide concrete sidewalk as well as concrete curb and gutter along the ent~re eastern Property line of the Property, as shown in the ProJect Plans. 3. Developer shall repair any pavement damage to Paciflc Coast Highway between the northern and southern boundaries of the Project caused by construction vehicles travellng to and from the Project, Determlnation of what repalrs Developer 15 required to perform shall be based upon an objective payment analysis carried out by the City after construction has been completed but prior to issuance of the Certificate of occupancy for the Hotel. Developer shall be responsible for obtaining all necessary CalTrans permits for such repairs. 4. A hydrology study shall be performed by Developer to identify any drainage facilities which may be necessary on the Property. 5, The Developer shall provide refuse collection and recycling facilities for the Project which shall be accessible to City refuse and recycling collection vehicles. The refuse/recycling collection area in the Hotel portion of the Project shall be a minimum twenty (20) feet by twenty-five (25) feet in size with a minimum fourteen (14) foot headroom clearance for collection vehicles. 6, Developer shall formulate and implement an on-site solid waste recycling plan to be approved by the City. This plan must show the proposed methods by which the Project will collect all recyclable solid waste and transport it to a materials reprocessor, This plan shall also show how the Project will achieve a goal of twenty-five percent (25%) total solid waste diversion (by volume) by January 1, 1995 and a fifty percent (50%) diversion (by volume) by January 1, 2000. -2- 7. A water recycling system for the Hotel laundry facility shall be selected and installed by the Developer following approval by the City Engineer, which approval shall not be unreasonably withheld or delayed. 8. Developer shall conduct a study to evaluate the feasibility of providing on-site co-generation or a solar-heating system for forty percent (40%) of all water heating demands by the Project, including without limitation the demands of the Hotel Pool (but excluding Hotel laundry facilities). This feasibility study shall include as a part of its evaluation, a study of whether such co-generation or solar heating-system will be cost-effective for Developer and aesthetically compatible with the Project. Developer shall submit the feasibility study to the City Manager for approval. 9, Non-disposable food containers (plates) and utensils shall be used for all non take-out food service in the Project. All disposable take-out food service conta~ners shall be recyclable. The Developer shall provide collection containers for this recyclable waste and shall include in its overall recycling plan a discuss10n of the methods which will be used to collect, transport and process this recyclable waste from the food facilities. The Developer shall also carry out a twice daily beach litter cleanup effort during the Peak Act1vity Period and once daily during the Non-Peak Activity Period to collect and properly dispose of all project- -]- generated beach litter within five hundred (500) feet of the Project. 10. All applicable General Services Department fees and charges shall be paid by the Developer which may include the following: sewer connection fee, water connection fee, water meter fee, street use, use of public property and barricade permit fees. At the discretion of the General Services Department, the Developer may be required to construct the necessary water and sewer improvements for the Project in lieu of payment of the water and/or sewer connection fees, provided that the cost of said construction shall not exceed the amount of the water and/or sewer connection fees which Developer otherwise would have paid. 11. Any damage to off-site public property or improvements which are caused during the construction of the project shall be repaired by the Developer, 12. All construction activity, includlng actual construction, staging of constructlon, delivery of materials and storage of materials and equipment, shall be confined to the boundaries of the Project. Any use of public property around the Project for construction activity shall only be approved if absolutely necessary for the completion of the Project. If a use of publlC property permit is requested and granted, the duration of each permit shall be seven (7) days and each separate seven -4- (7) day permit shall be charged at the rate of One Dollar ($1,00) per square foot of public property used. RAL:hs:DW12DS25.223 (06/25/90) -5- ~ 8'-e 11-8 JUL 1 7 1990 JUl J 1 i9~~ ~\lG i \~~~ THE SANTA MONICA BEACH HOTEL AND COMMUNITY CENTER CITY COUNCIL STAFF REPORT '- l..\ l <;" ? c. n COUNCIL MEETING DATE: JULY 17, 1990 ATTACHMENTS AVAILABLE AT ADDITIONAL CHARGE UNDER SEPARATE COVER p-(! II...B JUL 1 7 1990 rAUs .,~,. ~n JUl 3 1 1990 \. 1 .... '~. ~ ... :-- . ~. . . . l THE PROPOSED SANTA MONICA BEACH HOTEL AND COMMUNITY CENTER CITY COUNCIL STAFF REPORT TABLE OF CONTENTS SUMMARY, . INTRODUCTION . . BACKGROUND . . . . . ~ PROJECT DESCRIPTION. . & . . . . . . Floor Santa Santa Other . . .. " . . Area Summary" ... Monica Beach Hotel. . . . . . . . , . . Monica Beach Community Center Project Aspects , . . . . . . . . . . . . ~ CEQA COMPLIANCE AND ENVIRONMENTAL REVIEW PROCESS . Final EIR Addendum 1. Final EIR Addendum 2. .. . . . . . .. . . ~ DEVELOPMENT AGREEMENT. . . . . . TARGETING OF TOT REVENUE . CONCESSION AGREEMENT AND GROUND LEASE. DISPOSITION AND DEVELOPMENT AGREEMENT. , TRI PARTY AGREEMENT. . . . . BUDGET/FINANCIAL IMPACT. . . . . MUNICIPAL CODE AND GENERAL PLAN CONFORMANCE, . PLANNING COMMISSION ACTIONS AND RECOMMENDATIONS. Public Beach Facility Comparative Analysis. STAFF RECOMMENDATIONS. , , \._~ ~ ~, ".' -- ~. ................ . . . .. . . 1 , . 1 . . 2 . . , , 6 , . 7 . , 8 , . 9 . .12 . . , .14 . ,17 , .19 , ,2 a ,21 . .21 , .24 , .26 .26 . .28 . . . ,2 8 ,31 . .36 ~ ATTACHMENTS: 1. Planning Commission staff Report (May 23, 1990) 2. Development Agreement 3. Concession Agreement and Ground Lease 4. Disposition and Development Agreement 5. Tri-Party Agreement 6. Planning Commission Information Item (May 30, 1990) 7. Resolution Certifying Final Environmental Impact Report with Statement of overriding Considerations 8. Ordinance Adopting the Development Agreement 9. Resolution Authorizing the Negotiation and Execution of the Concession Agreement and Ground Lease 10. Resolution Authorizing the Negotiation and Execution of the Disposition and Development Agreement 11. Resolution Approving the Tri-Party Agreement 12. Mitigation Monitoring Plan w/sstb1 ~ C/ED:PPD COUNCIL MEETING: July 17, 1990 Santa Monica, California TO: Mayor and City council FROM: City Staff SUBJECT: Recommendation to certify Final Environmental Impact Report; Adopt statement of Overriding Considerations; introduction for the first reading of an ordinance Adopting the Development Agreement; Authorize Negotiation and Execution of the Concession Agreement and Ground Lease, Disposition and Development Agreement for the Proposed Santa Monica Beach Hotel and Community Center Project at 415 Pacific Coast Highway; and Authorize Execution of the Tri-Party Agreement. INTRODUCTION This staff report provides the City council with recommendations concerning the proposed Santa Monica Beach Hotel and Community Center project at ~~ Pacific Coast Highway. It recommends that the city council introduce for first reading an ordinance adopting the Development Agreement, and authorize city Manager to negotiate and execute the Concession Agreement and Ground Lease and Disposition and Development Agreement (DDA) execute Tri-Party Agreement, and certify the Final Environmental Impact Report (EIR), adopting a statement of Overriding Considerations for the potential traffic impacts at the intersection of Pacific Coast Highway and the California Incline. SUMMARY This report provides the Council with: o a brief history of the site, how and when the proj ect proposal was selected and an update on events that have taken place since the project was last before the Council in June, 1988 (pgs 2-6); o a detailed description of the proposed hotel and community center including square footage estimates, land and programmatic uses, parking provisions, vehicle access, pedestrian circulation and a proposed development schedule (pgs 6-14); - 1 - o an overview of the environmental review process and compliance with CEQA which includes a discussion of the p~blic review process, alternatives analyzed in the EIR and Addendums 1 and 2 (pgs 14-19); o a review of the key elements contained in the Development Agreement including the proposal for targeting of Transient Occupancy Tax revenue (pgs 19-20); o a brief description of the purpose and content of the Concession Agreement and Ground Lease and Disposition and Development and Tri-Party Agreements (pgs. 21-26: o a summary of the proposed project's fiscal benefits to the City including annual revenue payments and municipal taxes to the City (pgs 26-27); o a discussion of the proposed project's conformance with the Municipal Code and General Plan (page 27): o a presentation of the Planning Commission Actions and Recommendations from meetings held on May 23 and May 30, 1990 (pgs 28-30), and o a comparative analysis of a public beach facility alternative which would convert the existing private facilities into a City-run public beach facility (pgs 30-35) . The report concludes with staff recommendations to approve the project (pgs 35-36). Many sections of the report refer to the reader to attachments, All attachments have been made available to the public. BACKGROUND The project site is a 4.91 acre beachfront parcel located at 415 Pacific Coast Highway (PCH). The property was originally developed in the 1920ls as a private estate for Marion Davies by William Randolph Hearst. The estate was purchased in the 1940's by a private party and converted to a hotel and beach club, In 1959, the State of California acquired the property and granted management responsibility to the City of santa Monica under the terms of a long-term operating agreement. Since 1960, the property has been occupied pursuant to a concession agreement by the Sand and Sea Club, a private, limited membership beach club, Regular access to facilities on the site - 2 - is limited to members and their guests. basis, the Club's facilities have been civic and recreational organizations. On a limited, occasional made available to various In 1981, the Sand and Sea Club concession agreement as well as the State operating agreement expired. At that time, the State directed the City to seek competitive proposals to lease the property for public use. I'he City selected a proposal that included a modified version of the Sand and Sea Club. However, this selection was rej ected by the State due to the continued incorporation of private memberships for use of the facilities, The Sand and Sea Club continues to occupy the site pursuant to a concession agreement on a month-to-month basis for $250,000 per year, The Sand and Sea Club receives all income from the on-site restaurant and public parking lot. In 1986, the State again instructed the City to seek new proposals for use of the site. The terms of the Request for Proposals (RFP), which were developed in conjunction with and approved by the state, included state mandates that any new use on the site produce at least $500,000 per year in lease revenues, and that exclusively private use of the site be terminated. In keeping with the state's and City Council' s directives, on April 1, 1987, the City issued a second Request for Proposal for development of the site, The RFP reflected conformance with the City's Land Use Element of the General Plan, Zoning Ordinance, and the Draft Local Coastal Plan. The purpose of the RFP was to select one developer with whom to exclusively negotiate a use agreement/lease for development of coastal-related, visitor-serving facilities on the project site, The principal obj ective of the RFP was to seek a proj ect which effectively balanced increased revenues generated from the site with increased public access to the site, while at the same time not compromising the environmental and architectural quality of the surrounding residential uses and beachfront, Preservation of the City Landmark North House was encouraged but not required. - 3 - Availability of the RFP was noticed in several statewide pUblications. Nearly 200 potential developers requested and received copies of the RFP. Eleven proposals were received by the deadline of July 1, 1987. city staff from the City Manager's office, Community and Economic Development Department and Recreation and Parks Department were assisted by the consulting firm of Keyser Marsten Associates, Inc. in the review and analysis of the proposals. The state Department of Parks and Recreation was also kept advised during the review process, All eleven proposals were reviewed in detail. The principals were invited to interviews as well as asked for written responses to outstanding questions and issues during the evaluation process. In addition to meeting the obj ecti ves of the RFP, developers were evaluated on the basis of financial capability, experience with projects of similar scale and character, experience in working with public agencies on similar public/private partnerships, as well as qualifications of key staff, management experience, and organization and management approach. Four development teams emerged as the most capable and experienced of the 11 proposals, while at the same time most effectively balancing the public access and revenue generating components of the RFP. City staff evaluated each of the four finalists in a number of key land use and lease agreement areas and recommended to the City council that it select the Santa Monica Beach Development Partnership to develop the property. On June 14, 1988 the City council conducted a public hearing and voted to select the Santa Monica Beach Development Partnership to enter into exclusive negotiations of lease, development, and other agreements necessary for development of the property. Once selected the Partnership began work to more specifically define a development and programming concept necessary to begin work on the environmental review documents. This development took nearly a year to accomplish and included the active participation of City staff, consultants and the public, Because - 4 - <' of the public nature of the site, the community Center in particular, the developer convened a public access task force. This group met several times and played an instrumental role in the development of the programming aspects of the Community Center. The task force included representatives from the City's neighborhood organizations, the School District, the arts community, recreation and environmental activists. The group provided the developer with insight into the programming needs of the community with sensitivity to affordability and accessibility issues for specific age and ethnic/minority groups. The developer also presented the proposed project to two City Commissions that are not typically included in the City's development review process: the Commission on the status of Women (COSW) and the Commission on Older Americans. The COSW voted to endorse the project because of the educational benefits and opportunities for a model pUblic-private partnership including the School District, The Commission on Older Americans voted to endorse the proj ect because of the need for community room space, the developer's plan to provide shuttle service to the site and the boardwalk plank across the beach toward the shoreline. Due to the beachfront location of the proposed proj ect, the Recreation and Parks Commission has been involved in the preliminary review and development of the community programming aspects of the proj ect. Two public hearings have been held before the Recreation and Parks Commission. In addition, there were several interim project status reports presented at Commission meetings. The first hearing, held in september, 1988 surfaced concern about the lack of active recreational areas proposed on the site. When staff returned to the Commission in April, 1990 for a final review, the Commission unanimously voted in favor of the project, The Commission commended the developer for the level of community involvement and outreach. The Commission also supported the Beach Fund allocation priority regarding capital improvements to the Beach, as presented by - 5 - staff, which proposes new active recreational facilities south of the pier as soon as funds from the project become available. since council selection of the project, state agencies have also been kept informed of project developments. Coastal Commission staff has reviewed and provided comments on the project as well as the state Department of Parks and Recreation and Caltrans. PROJECT DESCRIPTION Existing improvements include the Sand and Sea Club facilities, a public beach restroom at the northwest corner of the site, a 176-space public beach parking lot and small concession stand at the south end of the site, Also located on the site is the City Landmark North House. The Landmarks Commission has recognized the entire site as one of Historic Interest, The proposed project would relocate the North House to the northern edge of the parcel. It would be restored and expanded to house the Community Center. All other existing improvements would be demolished. The Santa Monica Beach Hotel and Community Center would consist of a full service luxury hotel and an adjacent Community Center complex, The hotel would contain a minimum of 148 and a maximum of 160 rental rooms. Twelve suites would be designed to be sub-divided into smaller suites and single rooms. The proj ect developer proposes to develop a total of 209,684 square feet of adjusted floor area on the 4.91 acre site, The following table provides a floor area summary for selected uses of the project. - 6 - FLOOR AREA SUMMARY FOR SELECTED USES Per Zoning Ordinance Definition of Floor Area HOTEL 148/160 Guest Rooms Hotel Restaurant Interior Dining Outdoor Dining Kitchen Restaurant Bar Conference Center/Meeting Rooms Ballroom/Banquet Facilities Hotel Guests' Health Spa 98,428 s.f. 4,960 2,030 1,500 1,430 840 4,428 1,512 1,255 COMMUNITY CENTER Beach Cafe Indoor Dining Outdoor Dining Kitchen Bathrooms Public Changing Rooms Community Room 1,417 s.f. 1,583 349 84 2,330 815 (plus a 1,075' terrace Art and Marine Learning Center Marine Learning Center Arts/Cultural Center 6,197 2,672 3,525 A total of 528 parking spaces would be developed on two levels of subterranean parking, These spaces will accommodate employees of and visitors to the hotel, restaurant, Beach Cafe, community Center and replace the 176 beach parking spaces currently on-site, - 7 - A shared use analysis of the project's parking demand was conducted and determined that the peak parking demand would be 524 spaces. The proposed supply of 528 spaces will be sufficient to accommodate the combined peak hotel and Community Center demands along with the replacement of the beach parking. The Santa Monica Beach Hotel The hotel guest room arrangements consist of single rooms (124), one bedroom suites (12), two bedroom suites (10), a Vice Presidential suite and a Presidential suite. Some suites would be arranged on two floors connected by an interior circular stair. All the two bedroom suites would be designed to break down to single rooms, if needed. The two presidential suites would be designed to break down to separate one bedroom suites, if needed. A minimum of 148 and a maximum of 160 room keys will be provided. All rooms feature either direct ocean views or views of the project's landscaped gardens and have private balconies or patios. The architecture consists of 2, 3 and 4 story buildings. The hotel buildings parallel to Pacific Coast Highway would be 4-stories and 35 feet high. Four stories can be accommodated by the smaller floor-to-floor height characteristics of a hotel, and setting the four-story building approximately 5 feet below the grade of Pacific Coast Highway, since the grade slopes downward toward the ocean, The design includes mechanical screening to create a more interesting roof line and more appealing view of the project from Palisades Park. These roof enhancements would add a maximum of 10' feet in building height to a limited area. Thus, the effective building height for these portions of the two buildings with screening would be 45 feet, 10 feet greater than the prescribed limit but the same as the 45 feet height maximum in the R-4 Zone. In addition to lodging, the hotel is proposed with an indoor/outdoor restaurant which would begin inside the main hotel bui Iding and expand outward toward the pool and beach, The - 8 - restaurant and bar are approximately 4,960 and 840 square feet, respectively. There are 100 restaurant seats inside and 100 seats outside with a 25-seat indoor bar area. Other hotel features include a meeting room/conference center (second floor, approximately 4,428 s. f,) featuring six meeting rooms equipped with advanced audio-visual and communications systems; ballroom/banquet facilities (third floor, approximately 7,572 s.f,); a mUlti-purpose room (ground floor, approximately 2,000 s. f.) to be used for a variety of uses including Community Center-related performances, film/video screenings, public meetings and as overflow meeting space for either conference center or ballroom/banquet facilities. The multi-purpose room would have no stage or fixed seating. The Santa Monica Beach Community Center The Santa Monica Beach Community Center would consist of approximately 19,633 square feet of space for public use and recreation. The Community Center would be housed in the historic Marion Davies North House, a City Landmark which would be rehabilitated and renovated for community activities. This would be the first time this Landmark has been open and available to the public. The existing North House would form the second and third floors of the Community Center and would be set on top of a new concrete "plinth" level which would serve as the Center I s ground floor. All the North House exterior surfaces, architectural features and significant interior features would be repaired and restored, consistent with accepted preservation practices and in keeping with the goal of creating a pUblicly-accessible, adaptive re-use of the structure, The proposed Community Center would contain a beach front cafe with 100 indoor and 100 outdoor seats (approximately 3,433 s,f,), public changing rooms and indoor shower facilities (approximately 2,330 s.f.), a community meeting room (approximately 815 interior s. f. and a 1,075 5, f. outdoor terrace) and an Arts and Marine Learning Center (approximately 6,197 s,f.). - 9 - Directly adj acent to the Community Center would be an outdoor sculpture garden, a children's play area, a seasonal sales/rental kiosk for beachgoers, and a direct connection to the beach bicycle path, The developer would be responsible for construction, staffing and operation of the beach cafel public changing and shower facilities I meeting rooml arts and Marine Learning Center and all related cultural, artistic and environmental programming. The developer proposes to use revenues from the beach cafe, fees generated from other public uses of the Community Center and fund raising to contribute to these operating costs. The developer anticipates subsidizing the remainder of the Community Center operating costs from hotel revenues, The Beach Cafe The western end of the Community Center's ground floor would feature a moderately-priced 200-seat cafe with an open kitchen plan. A walk-up window would also be available for beach visitors and bicyclists. Packaging of food in recyclable materials would be required at the walk-up window. The Development Agreement requires the developer to conduct a beach litter cleanup effort twice daily during peak activity periods within 500 feet of the project site, The PUblic Changing Facilities Located on the Community Center's ground floor I and adjacent to the Beach Cafel would be separate Changing rooms and showers for women and men. Beach visitors would be able to place their clothing into special baskets to be stored in a secure separate storage room that would be maintained by Center staff. Towels and other shower items would be also be available. The changing rooms would be equipped with basic locker room amenities and would be open year round. - 10 - The Beach Rental Kiosk During peak summer months, the developer would operate a sales and rental kiosk adj acent to the beach. This non-permanent, portable structure would offer a variety of beach items for rent and/or purchase such as boogie boards, badminton nets, volleyballs, paddle ball sets, fins, beach chairs, umbrellas, sunning and skin protection products. The Community Room On the second floor of the Community Center, above the Beach Cafe and facing the ocean, would be a new public meeting room. This room seats up to 70 people and opens onto an outdoor terrace facing west. It is intended to be operated on similar terms and conditions governing the use of other public meeting facilities now located in City parks. Advance reservations would be offered for a minimum two-hour use, The room would be available on a year-round basis. The Community Room would be fully equipped with a sound system, audio-visual capabilities, and a supply of tables and chairs to accommodate a variety of meeting formats, PUblic Restrooms and Outdoor Showers Public restrooms would the Community Center. would also be provided. be available on the first two levels of Outdoor showers and drinking fountains The Art and Marine Learning Center The Art and Marine Learning Center would consist of environmental, arts and cultural programming. The center would promote access to the beach and the arts through a variety of activities and explorations of the ecology and the arts, The environmental component would of the center and offer users actively involved in monitoring beach ecology, marine life and be located on the ground floor new opportunities to become cri tical issues affecting the Santa Monica Bay. The Los - 11 - Angeles County Natural History Museum has signed a letter of intent with the developer to pursue negotiations to manage and operate the environmental facility. The arts component would occupy most of the second and third floors of the center and provide a variety of innovative visual and performing arts activities. This space includes three studios, offices and storage areas. It is anticipated that the westside Arts Center would relocate to the site, Program examples could include an arts curriculum designed to be part of the Santa Monica-Malibu Unified School District's Middle School curriculum and a variety of visual and performing arts classes geared towards different age groups, including adults and seniors, other activities could include arts demonstrations, performances and special events. Weekend programs would consist primarily of drop-in activities for beach visitors, bicyclists, and Beach Cafe customers, other Outdoor Recreation Facilities Adj acent to the Community Center there would also be several other outdoor recreation facilities for the public, Immediately west of the public parking entrance ramp would be a public sculpture garden. To the west of the outdoor seating area for the beach cafe would be a children's play area to be equipped by the developer. A boardwalk plank from the sculpture garden to the beach area would be provided to improve access to the beach for those with physical limitations. A new connection to the beach bike path would be constructed and bike racks would be made available. Beach volleyball facilities would also be available. Other Project Aspects Projeet Art program The proposed proj ect would display contemporary art, featuring local artists throughout the site. Art would be featured in the sculpture garden as well as the hotel gardens, Public art with a value of at least 1% of hard construction costs would be provided - 12 - in the pUblic areas. In addition, privately-owned art would be provided throughout the project in areas chosen by the developer. The aggregate amount of both public and private art on the site will not be less than two million dollars, Landscape Design Concept The landscape design concept for the proj ect is composed of a series of garden areas. Landscape features and flowers would be a central element in the design of the project. The gardens would utilize water conservation principles in plant selection, garden design, maintenance and irrigation. Native Southern California plants, selected from the City's Guide to Water Conservation Landscape Requirements, would constitute the majority of the plant list. Vehicle Access and Pedestrian circulation The project design features the following vehicular access and pedestrian circulation improvements: o a hotel auto court which accommodates vehicles of various sizes, including limousines and passenger vans. All hotel visitor vehicles would be handled by a 24-hour valet parking service. Valets would take vehicles to either the first or second level parking area by way of a separate ramp, The auto court is designed to allow vehicles to turn-around and re-enter the main project driveway without going down the valet parking ramp: o a drop-off lane located in front (south) of the community Center, This lane permits drivers to unload passengers and equipment. Drivers would then choose to either continue to the ramp down to parking level 2 or turn around and exit the site: o a pUblic parking ramp located between the hotel and Community Center on the west end of the site leading - 13 - down to the public parking contained on level 2, The 281 ramp would also be used by service vehicles. The ramp leads to Parking level 1 which contains the publicly accessible handicapped spaces, hotel parking, loading and unloading for service and trash vehicles. o a drop-Off zone for school buses and vans is located just south of the project driveway, parallel to Pacific Coast Highway; o pedestrian access from the public parking level 2 is provided by way of an elevator to the ground floor of the Community Center, and by stairs located at the northwest corner of the parking garage, Public wishing to access the beach may use either the elevator or stairs. o pedestrian and bicyclists would be able to access the site from the beach (west). A new link to the beach bike path would be made to the site; o a five-foot wide sidewalk parallel to Pacific Coast Highway stretches from the project driveway to the south end of the site; o an over-the-sand wood plank system for access to the shoreline for the disabled. Proposed Development Schedule The project would be constructed of 18 to 24 months beginning in simultaneous occupancy for the Community Center in late 1993, in a single phase over a period 1992, Current plans anticipate Santa Monica Beach Hotel and CEQA COMPLIANCE: THE ENVIRONMENTAL REVIEW PROCESS The CEQA rev iew This preliminary that the proposed began in August, 1988 with an Initial study. assessment of the proposed proj ect determined project could have a significant adverse impact - 14 - on the environment and that an environmental impact report (EIR) should be prepared. On November 7, 1988, a Notice of Preparation of an EIR was issued, and a scoping meeting with the public, proj ect developer, City staff and the environmental consultant was held on November 21, 1988, In April, 1989, an amended application was submitted by the project developer which proposed minor changes to the building design and on-site access and circulation for the project. These changes were incorporated and analyzed as part of the project EIR, The Draft EIR was released for public review on December 22, 1989. In response to public request, the initial 4S-day review period was extended for an additional eight days and closed on February 13, 1990. The Draft EIR found that the project would result in beneficial impacts to the city I s Beach Fund, cuI tural and recrea tional resources and public access to the site. The Draft EIR found that all potentially significant adverse environmental impacts could be mitigated to le.ss than significant levels except for short-term air quality conditions during construction and the pm peak traffic conditions at one intersection, PCH and California Incline.. Thirty six comment letters responded to the Draft EIR findings: five public agencies, thirteen organizations, seventeen individuals and the project developer. Most comments concerned issues of traffic, air quality, accessl preservation of the North House, aesthetics and alternative uses for the site. All comment letters received during and the DEIR public review period and their respective responses can be found in the Final EIR, Volume 2. The Final EIR concluded that the short-term air quality impacts could be reduced to a less than significant level by requiring additional mitigation measures. Although traffic mitigation measures were suggested by the applicant, the Final EIR maintained the conclusion that the project would have a - 15 - significant impact at the intersection of PCH and the California Incline during weekday afternoon rush hours, After preparation of the Final EIR, the developer proposed two project changes to reduce the significant impact. These measures would require that the hotel restaurant be closed on weekdays between 3:30 and 6:30 and reduce the size of the Beach Cafe from 200 to 160 seats. Upon a technical analysis by the City's traffic consultant, staff concluded that these measures were feasible, enforceable and would reduce the impact to an acceptable, less than significant level. The EIR analyzed six alternatives to the proposed project: (A) No change in pre-project conditions: (B) Hotel development at decreased intensity: (C) Public park and parking lot; (D) A mixed-use recreational facility including restaurant, museum, meeting room, and a parking lot; (E) Public beach facility and restaurant, and (F) Alternative sites for the proposed project. The selection of alternatives was based on an ability to satisfy the two major criteria for alternatives established by the CEQA Guidelines: the potential to mitigate significant project-related impacts and the feasibility relative to the project Objectives. these objectives were: o To remove the private beach club use of the project site in response to a directive from the state. o To provide for increased public access to the project site. o To provide a minimum annual revenue of $500,000 to the City for beach improvements and maintenance. o To provide for development of coastal/beach-dependent activities. - 16 - o To apply the highest standards of architectural design to the proposed development on the project site, with a mix of uses that are both archi tecturally and environmentally sensitive to the site and adjacent land uses. Alternatives were also based on other development proposals received during the city's Request for Proposals process. Further, alternatives A and F and a discussion of the environmentally superior alternative are specifically mandated by CEQA. Public comments were received addressing policy issues such as allowing beach land to be used for private development and the perceived loss of recreational facilities. These comments raised issues that are not necessarily related to environmental review or proj ect-related impacts but are policy-related as to the appropriate use of the site. Final ErR Addendum 1 After preparation of the Draft EIR, a possible conflict was found between the proposed design of the parking facility and provisions of the Santa Monica Bay Preservation Ordinance of 1973. This Ordinance regulates construction of certain IIbuildingsll west of the 1921 Mean High Tide Line. It is the opinion of the City Attorney that it is unclear whether this Ordinance affects a wholly subterranean parking facility, as proposed by the developer. Therefore, the developer has prepared an al ternata design for the subterranean facility, locating it completely east of the 1921 mean high tide line. This alternative is included in the event that the original design is found violative of the Santa Monica Bay Preservation Ordinance, Since the ultimate resolution of this issue is unclear, the original and alternate designs for the subterranean parking facility are presented as options in the Development Agreement and an Addendum to the ErR was prepared, - 17 - Addendum 1 analyzed a development alternative consisting of the proj ect as proposed but with the two-level subterranean garage located entirely east of the 1921 Mean High Tide Line. Under this alternative, the location of the driveway entrance to the site would remain the same, but the pUblic parking ramp would begin approximately 10 feet to the east of the location shown for the proposed project and curve under the hotel (see Addendum 1, Figure 1). The hotel's valet parking ramps would remain as shown in the project, Under this alternative, each parking level would be rectangular rather than square in shape. Square footage changes under this alternative as compared to the proposed project are limited to subterranean parking levels, hotel back-of-house and health spa, and the hotel multi-purpose room, This alternative does not change the gross or adjusted floor area of the Project as analyzed in the DEIR or FEIR because: (1) subterranean parking is not counted in the City's definition of "floor area," and (2) the additional floor area needed for the health spa and hotel back-of-the-house areas (which results from a less efficient rectangular design of the P-l parking level) is no greater than the floor area associated with the hotel mUlti-purpose room, which has been eliminated in this alternative to accommodate the new public parking ramp. The environmental implications of this development alternative as compared to the proposed project are discussed in the Addendum. The document concludes that, although there would be some increase in construction noise and air quality related impacts with this alternative as compared to the proposed project, these increases would not create any significant impacts. All other density-related impact issues and design-related issues would be the same or comparable to the proposed project. The costs of constructing the alternative garage design are substantially higher than the preferred garage. If the developer elects to construct the alternative garage design, up to half of the additional construction cost to a specified maximum may be offset by percentage rent over time. The amount of construction - 18 - rent would never be less than $650,000. would never be less than $1 million. The annual base rent Final EIR Addendum 2 On May 22, 1990, following publication of the Final EIR, the City received a letter from the California Department of Transportation (Caltrans). This letter requested that the project include a 121 wide, 350' long acceleration lane for cars turning right and merging into southbound peH from the proj ect driveway, since the DEIR and FEIR did not analyze and/or recommend an acceleration lane, a second Addendum was prepared to analyze the environmental implications of installing a lane for vehicles exiting the site and merging southbound into Pacific Coast Highway. Addendum 2 eval ua ted the areas of potential environmental impact from this alternative design. It determined that the potential for environmental impact existed in right of way/access and aesthetics. The addendum analyzed possible ingress/egress scenarios not evaluated in previous environmental documents. These scenarios include the proposed project (1) with a traffic signal and acceleration lane, and (2) without a traffic signal but with an acceleration lane. The Addendum discusses the potential advantages and disadvantages of installing an acceleration lane. If an acceleration lane is included in the project, some minor design modifications are required, The first hotel wing will no longer step back between the second and third levels. The Addendum concludes that this is not an adverse impact since the setback from PCH has been increased by 12 feet, the width of the acceleration lane. The purpose of the step backs was to relieve the impact of the building mass on PCH. The Addendum concludes that the installation of an acceleration lane would not create any new adverse impacts, In fact, beneficial impacts relative to right-of-way/access and aesthetics are anticipated. - 19 - DEVELOPMENT AGREEMENT The Development Agreement (DA) contains the land use and development standards that will regulate the project uses, height, size design and scale of the project. The Agreement delineates the responsibilities and obligations of both the Developer and the City before, during, and after construction of the project. A detailed discussion of the key elements contained in the DA can be found in the Planning Commission staff report (Attachment 1, pages 35 - 46). These elements describe: o maximum floor area o building height o maximum parcel coverage o minimum setbacks o access and circulation o landscaping o parking o permitted uses o changes to the project o application of existing land use regulations o Landmarks Commission Review The DA also describes the mitigation measures required for the project. Mitigation measures and fee categories include: o parks and recreation o arts o design o General Services requirements o public sewer capacity allocation The Development Agreement, in its entirety, is provided as Attachment 2 to this report. - 20 - TARGETING OF TRANSIENT OCCUPANCY TAX (TOT) REVENUE The draft Development Agreement submitted by the applicant includes language targeting 75% of the General Fund - TOT revenue for the first 10 years of the operation of the hotel to specific activities. These include: 25% to the Santa Monica Bay Restoration Project or similar organization or fund dedicated to restoration of the Santa Monica Bay; 25% to the City for maintenance, security and capital improvements in City parks, and 25% to the City budget to reimburse the School District for costs associated with student recreational, artistic and athletic costs. The remaining 25% would not be earmarked and would go to the General Fund. As the Council will note below, the Planning Commission recommended earmarking the TOT funds. This issue is considered a budgetary and policy matter for council consideration, CONCESSION AGREEMENT AND GROUND LEASE The City proposes to enter into the Concession Agreement and Ground Lease (hereinafter "Lease") on its own behalf and on behalf of the State of California pursuant to the State operating Agreement. The tenant/concessionaire will be Santa Monica Beach Development Limited Partnership, The Lease contains the business terms for the leasing and development of the Hotel, community Center, and parking facility at the site and is provided as Attachment 3. The Lease was prepared with the guidance of outside legal counsel who specializes in real estate matters and ground leases. The lease is a "triple net" lease, meaning that the developer will be required to pay all taxes, assessments, operating expenses, repairs and replacement relating to the premises during the term. - 21 - Prior to commencement of any construction work, the developer will be required to deliver to the City a performance bond and labor and material payment bond guaranteeing full performance of the construction of the project. Additionally a construction security deposit of $1,000,000 (cash or letter of credit) will be required as further security for the developer I s construction obligations~ The Lease provides the City with a guaranteed source of ground rent income from the property and an opportunity to participate in the various types of profits the developer may realize from the project. The Lease also provides that the developer is responsible for all expenses of Community Center operat1ons, with no City subsidy. The Lease obligates the developer to pay a construction holding fee once it takes possession of the property in an amount between $54,167 and $79,167 per month. At the end of the construction (or no later than 18 months after taking possession), the developer is obligated to begin base rent payments. The annual base rent will be not less than $1,080,000, The lease also provides for escalation of the initial guaranteed base rent to keep pace with inflation, Base rent will be increased proportionately with the increase in CPI each five-year anniversary of the commencement date, through the term of the Lease, with an annual floor of three percent and an annual cap of six percent, determined cumulatively over each five year period. The developer is required to pay the City a share of the gross revenue it realizes from operation of the Hotel. The city will receive as percentage rent the amount by which the sum of the following amounts exceeds base rent: 6% of Hotel room occupancy charges; 3% of Hotel food and non-alcoholic beverage sales, 5% of alcoholic beverage sales, 10% of Hotel parking revenue; 8% of electronic information and data service revenue; 10% of sublease revenue; and 10% of all other revenue, Additionally, the City will be entitled to receive 60% of all Public Parking Revenue, - 22 - seven percent of the net proceeds of any sale, and five percent of the net proceeds of any refinancing during the term of the Lease. The Community Center Operating Agreement is an Exhibit to the Lease, and is incorporated into the Lease. It governs the developer's obligations to manage and operate the Community Center including the Arts and Cultural Center, Marine Learning Center, Community Room, Public Beach Facility, and Beach Cafe, The Agreement outlines the city's approval rights concerning programming at the Community Center, and use of the Community Rooml and provides for annual performance summaries to be provided by the Developer. The Agreement also delineates the manner in which profits, if any, may be dedicated to future Community Center uses. The Community Center Agreement contains provisions concerning: o simultaneous opening of the Hotel and Community Center (with penalties for delay) o the goals of the Center; o the mandatory hours of operation; o operation of the beach cafel including menu pricing; o public beach facility hours and usage fees; o beach rental kiosk operation; o permissible fees and rules for use of the community room; o the plan for use of public beach, community center, and hotel parking; o approval of sublease operation of Community Center components; o the mandatory scholarship program for public participation in the arts and cultural programming;and o the City's rights upon default. In addition to other remedies, the Community Center Agreement provides that a developer default in operation of the Community Center, if not remedied, will constitute a default of the Concession Agreement and Ground Lease. Performance of Community - 23 - Center obligation is further guaranteed by a minimum $800,000 ongoing letter of credit. DISPOSITION AND DEVELOPMENT AGREEMENT The Disposition and Development Agreement ("DDA") governs the relationship between the City and the developer from the time the City approves the DDA and Development Agreement, until the property is ground leased to the developer, The principal activities occurring during the DDA period are the acquisition of additional City and state land use approvals necessary for the project, and pre-construction development required prior to the developer taking possession of the property. The DDA is provided as Attachment 4 to this report, The DDA delineates the city and state approvals to be obtained by the developer during the state approval period, The City approvals consist of approval of the Architectural Review Board, and approval by the city Landmarks Commission. If necessary, approval by the Santa Monica Rent Control Board will be required prior to demolition of existing improvements, The Primary state approvals include: approval of the Concession Agreement and Ground Lease by the state Department of Parks and Recreation; approval of alcohol sales by the State Parks and Recreation Commission, approval by CalTrans of traffic improvements required pursuant to the Development Agreement; approval of the Development Agreement and issuance of a Coastal Development Permit by the California Coastal Commission, and issuance of a liquor license from the Alcoholic Beverage Control Board. The State approval period commences on the effective date of the Ordinance adopting the Development Agreement, and terminates one year later. The period is subject to an extension of six months upon approval of the City, if the developer is diligently pursuing the state approvals. The period is subject to additional extensions only under certain delineated conditions not within the control of the developer, The DDA provides that if the primary State approvals are not obtained within the state - 24 - approval period, either the City or developer may terminate the agreement. The developer maYI however, choose to waive obtaining a liquor license and limit its project accordingly, rather than terminating the agreement. The DDA describes the partnership's obligations during the pre-construction development period, which commences upon receipt of state approvals. During this phase, the developer is required to: prepare the construction plans and submit them to the City for approval; to negotiate a guaranteed maximum price construction contract with a general contractor approved by the city; obtain a construction financing commitment which will demonstrate that funds will be available for the construction of the project; acquire all insurance required to be obtained by the city j obtain the payment and performance bonds required during construction: complete an environmental assessment of the property: and prepare a complete physical and operational plan for all parking areas of the project. The pre-construction development period will be 18 1/2 months, subject to extensions under certain delineated conditions not within the control of the developer. At the end of the pre-construction development period, the developer will take possession of the property, and commence payment to the City pursuant to the terms of the Concession Agreement and Ground Lease. The DDA obligates the City to terminate existing tenancies, but allows the City to retain control of the property until initiation of the Ground Lease. It allows the City to make use of the property in manners whiCh would not have a materially adverse impact on the development of the project or which would create rights in third parties inconsistent with delivery of possession of the property to the developer at takedown. Subj ect to the city's reasonable approval and the rights of third parties, the developer may enter the property during the pre-construction development phase to conduct tests, studies and surveys, The developer will be required to maintain a $500,000 letter of credit as security for the developer's obligations - 25 - during the pre-construction development period. The developer is also required to indemnify the City and state from liability for the developer's acts occurring on the property. The DDA also contains provisions concerning title reports and title insurance; clean up of hazardous materials if found on the property; approval of construction plans and the construction budget; defaults and remedies; assignment; extension of the state operating agreement; and arbitration of certain disputes. TRI-PARTY AGREEMENT Since 1949, the City has been party to various operating agreements with the State, under which state Parks and Recreation has granted authority to the City to manage State Park land and tidelands in the city, while title to the land remains vested in the State. The State has now asked that the City enter into the IITri-Party Agreement" which is intended to clarify issues regarding title to and control of beach and beach adjacent lands in the City. On behalf of the State, the Tri-Party Agreement will be executed by the state Department of Parks and Recreation, the State Lands Commission, and the Department of General services, and approved by the Attorney General's Office. The Tri-Party Agreement will also: transfer jurisdiction over tidelands in the City (at the State level) from State Lands to State Parks for a period of sixty years j establish a boundary line between tidelands and uplands for the entire Santa Monica shoreline; and confirm the legal effect of various grants and legislation transferring title to tidelands, The Tri-Party agreement is provided as Attachment 5 to this report. BUDGET/FINANCIAL IMPACT The lease term proposed for the project is sixty years with an option to extend the lease to ninety-nine years should there be a change in state law authorizing such term, Upon completion, the proposed project would provide economic benefits to the city of Santa Monica from annual revenues, annual - 26 - payments and municipal taxes. Concession and Lease revenues from the project are restricted for use to the City's Beach fund. Tax revenues would flow to the City I S General Fund, A summary of expected annual revenues from the project are shown in the following table: ANNUAL NET REVENUES FROM PROJECT 1993 DOLLARS Concession & Ground Lease Revenues Possessory Interest Tax utility User Tax Sales Tax Transient Occupancy Tax $1,080,000 89,000 139,000 34,000 l,671{000 SUBTOTAL: $3,013,000 Less Revenue from present lease (in '93 $) Possessory Interest Tax from Present Use 298,000 200 Net Revenue Increase Resulting from Project $2,714,800 There are also provisions for percentage rent payments should gross sales exceed the minimum annual lease payment, The percentages for major categories of activity are: 6% - Hotel rooms 3% - Hotel food 5% - Hotel alcoholic beverages 10% - Hotel parking revenue and sub-lease revenue Base rent and other required financial contributions will be increased by CPI factors over the term of the lease. Public access obligations are stated in both performance and financial terms, In addition, a series of guarantees and security deposits will be required, It should also be noted that during construction the developer would be required to pay rent, The annual amount of construction rent would be at least $650,000 but no more than $950,000, The - 27 - exact amount would be based upon the duration of the construction period, MUNICIPAL CODE AND GENERAL PLAN CONFORMANCE The use of a Development Agreement to approve the proj ect is proposed due to the time involved for State approvals and the extended development period. The Development Agreement will provide a consistent set of land use and development standards for the entire period of proj ect development and a program of mitigation measures and other developer obligations. The Municipal Code establishes procedures for adopting development agreements. To approve a development agreement, the City Council must determine that the proposed Development Agreement "is consistent with the General Plan and any applicable Specific Plan." However, development standards such as density, maximum height or permitted uses contained in a development agreement may vary from those established in the Zoning Ordinance. The proposed project is in conformity with the General Plan, the Zoning Ordinance and the Draft Land Use Plan of the Local Coastal Program as discussed in the Final EIR, Volumes I and 2 and summarized in the Planning commission staff report pages 47 - 50 (see attachment 1), PLANNING COMMISSION AC~IONS AND RECOMMENDATIONS The Planning Commission held a public hearing on Wednesday, May 23, 1990 in the City Council Chambers. All Planning commissioners were present to hear public testimony from 34 speakers. The hearing was continued to Wednesday May 30th when another 14 speakers were heard. The actions under consideration by the Commission were recommendations to council to certify the EIR and approve the Development Agreement. Prior to making a motion, the Commission questioned staff about: - 28 - o the status and use of the Beach Fund, o the revenue requirements imposed by the State Department of Parks and Recreation during the RFP review, o Caltrans' request for an acceleration lane, o the dewatering required for the subterranean parking, o alternative uses for the site, and o the protection of the North House during relocation. After discussion and consideration of these issues, a motion was made and seconded to certify the EIR with a statement of Overriding considerations and retention of the Beach Cafe at 200 seats. The Planning Commission found the reduction in size of the Beach Cafe unacceptable because it compromised a key project objective of increasing public access to the site. This motion included the revised mitigation measures recommended in the Planning Commission Information Item dated May 30, 1990 (see Attachment 5). These revisions added more specific, quantified language to air quality mitigation measures introduced in the Final EIR. Additionally, the Commission asked that an air filtration system for kitchen vents be a required mitigation measure which was incorporated in their action. The Commission recommended to the City Council certification of the Environmental Impact Report by a vote of 6 to 1. Commissioner Nelson opposed the recommendation due to concerns about the level of analysis on air quality, soils, geology and tsunami risk. Further, Commissioner Nelson stated his dissatisfaction with the city.s traffic methodology significance criteria and his concern about alcoholic beverage sales. The action of the Planning Commission regarding the Development Agreement was to recommend approval. The Commission requested staff to prepare for Council review an alternative using existing improvements on-site as a public beach facility and the proposed project. This discussion is provided below, The Commission made the following additional recommendations: (Staff comments are shown in parentheses) - 29 - 1. If legally feasible, the City should require the developer to give priority status for employment opportunities to Santa Monica residents, Second priority should go to persons living within 3 miles of the site. The intent of this recommendation is to reduce the commute distance of employees to the site. (The City has received preliminary indications from State staff that such a requirement would be unacceptable.) 2. The "economic feasibility" clause with reference to the rehabilitation of the North House be removed from the DA. (staff recommended that the clause remain with the stipulation that the feasibility be subject to staff approval. The Commission agreed.) 3, A public advisory committee be established to monitor and review Community Center programming. (The Community Center Operating Agreement requires the on-going review of the Community Center by a public advisory group.) 4, The selection of the developer's preservation architect be approved by the Landmarks Commission. 5. The developer be required to provide a presentation model of the proj ect for the Landmarks Commission and Architectural Review Board. 6. The City study the feasibility of installing large elevators from the public parking level to the Community Center. 7. The City Council earmark the Transient Occupancy Tax (TOT) from the site and allocation of the tax be subject to public review. 8. The City review the financial forecast of the Westside Arts Center. 9. The City Council open the site for public use as soon as possible. - 30 - The Planning Commission voted 5 to 2 in favor of recommending to the City Council the approval of the Development Agreement, Commissioners Nelson and Farivar voted against approval. Chair Nelson stated that he was not opposed to the land uses or to generating revenues from a hotel on the site but that he needed more information on the financial aspects of the proj ect and performance guarantees. Chair Nelson also strongly opposed the DA discussion of alcohol use on the site. Commissioner Farivar commented favorably on the land use of the proj ect but voted against approval of the DA because he felt the architecture was undeveloped, did not reflect the residential character of neighboring properties and did not realize the potential as presented in the developer's proposal. Staff has provided the following discussion in response to specific requests by the Planning commission during their deliberations on the proj act. The Commission requested that this information be presented to Council for consideration. Public Beach Facility Comparative Analysis On May 30th, the Planning Commission asked the City council to examine more closely a project alternative that would convert the existing site improvements to a public beach facility. The commission requested a comparative analysis between the proposed project and this alternative in the following areas: o potential revenue to City o City operating costs o capital cost (to City) o net income to city o number of "public" visitors to site o traffic/parking o overall public benefits To perform this comparative analysis, staff developed a series of working assumptions about the potential number of visitors, operating costs and net revenue that might be realized at a City-run public beach facility at 415 Pacific Coast Highway, - 31 - These assumptions are based upon a physical conversion of the facili ties currently on site. No programming efforts or City sponsored events are included in the calculations, In all cases, staff assumed that the pUblic demand for the physical facilities and access to the site/beach would be quite high. Potential Revenue Sources Based upon the existing facilities on site, staff identified four potential revenue sources: community room rental rates in the North House, daily visitor use fees, cabana daily use fees, and parking. It was assumed that any food service would be operated as a break-even operation in order to maintain affordability to public. Hourly Meeting Room Rates Based upon discussions with the City's Cultural and Recreation Services Department, staff projected a high demand for the North House community rooms. Staff estimated that North House could provide two community meeting rooms that could be reserved for two hour blocks, three times every weekday, and four times a day every Saturday and Sunday. Based on maximum occupancy 365 days a year and room rental rates of $20 for 2 hours, the annual gross revenue would be $47, 840. Daily Use Fees The existing Sand & Sea Club facilities were designed to accommodate a private beach facility that would generate revenue from annual membership dues, Conversion to a public beach facility eliminates this membership fee revenue stream, currently estimated to be over $1 million annually. In an attempt to recover this revenue at a public beach facility, staff looked at charging a daily per person use or admission fee, A survey of Southern California cities found none that had comparable public beach clubs i however, of the pUblic facilities located on the beach, none charge a daily use fee other than hourly meeting room rental rates and court/field reservation fees. - 32 - To help offset facility maintenance and operating costs, could charge a minimal daily use fee of $2 per person. would allow visitors access to the existing showers, pool and paddle tennis courts. the city This fee lockers, staff estimates that as many as 85,042 persons would visit a public beach facility at the site every year. This nwnber reflects the average parking space occupancy rates of 3 north beach parking lots (#530, #810 and #930) and the #1550 lot located just north of the Pier. The north lots were chosen for their relative proximity to the project site. The average space occupancy for the #1550 lot was also used because it is a high turnover (high income) lot due to its location next to the Pier as a destination attraction in addi tion to the beach. Using these per space averages, staff estimates that 34,017 cars would park in the 276 space lot every year. staff calculated a high average vehicle occupancy rate of 2.5 persons per car because of the location of the site and assuming that many families and groups would car pool to the site. Based upon 34,017 cars per year, 2,5 persons per car, staff projects that the site may attract as many as 85,042 visitors per year. At $2 per person, the daily use fee would generate $170 1084 annually, Cabana Daily Use Fee The existing 46 cabanas on-site could also be rented for a daily use fee. The cabanas are located near the northwest corner of the site and are housed in a two-story, L-shaped building. Based on the average year-round parking capacity rates and a $lO/day use fee, cabana rentals could generate an additional $50,370 annually. Parking At the south end of the site, there is a 176 public beach parking lot, This lot is operated by the Sand & Sea Club, currently, all revenues from this lot go to the Sand and Sea Club. The - 33 - Club has another approximately 100 spaces on site for Club members. As stated above, staff projects that 34,017 cars would park at the site each year. At the current parking fee of $5 per car, this would generate $170,085 per year. Annual Revenue summary Community Room Rentals Daily Visitor Fee Cabana Daily Use Fee Parking $ 47,840 $170,084 $ 50,370 $170,085 Total Annual $438,379 Expenses/costs capital and Rehabilitation Costs For the city to operate a public beach facility at the site, the buildings would have to be meet the City and state accessibility requirements as well as be rehabilltated and refurbished. Staff estimates that this would cost approximately $2,000,000. Debt service on a $2,000,000 loan over a 10 year period at 8% would be $292,120 annually. Expenses/Operating Costs staff estimated the operating costs to run a public beach facility. These estimates include supplies, maintenance, utilities, security and staffing among others. They are summarized in the following chart. General & Administrative Personnel Expenses Debt Service $270,000 $444,420 $292,120 Total $1,006,540 Net Annual Income <Loss> Projected - 34 - Revenue Expenses $ 438,379 $1,006,540 Revenue <loss> <$ 568,161> Revenue/Expense Sllmm~ry To operate a public beach facility on a break-even basis, the City would have to charge an additional $7 per person bringing the daily fee up to $9 per person. This is in addition to the $5.00 beach parking lot fee. Therefore, a family or group of 4 people visiting the site for the day would spend about $41,00 for access to the site, $51.00 if they wanted to rent a cabana, Further, the state has identified a significant revenue objective which must be met at 415 PCH: to generate a minimum of $500,000 for the City's Beach Fund. To meet the minimum income objective with a public beach facility, the daily use fee would have to be raised to $15 per person, or $65.00 for a group or family of four visitors. Again, the $5,00 parking fee would be in addition to the daily use fees. VisitorS/Traffic The proposed hotel and Community Center would attract an estimated 401,750 annual visitors: 171,000 hotel and 230,750 Community Center visitors as compared to the 85,000 estimated for a public beach facility. The proposed project would generate an estimated 2,400 daily trips. staff estimates that the public beach facility would generate approximately the same amount of traffic as the existing private beach club which is 690 daily trips. Conclusion The proposed Santa Monica Beach Hotel and Community Center project offers diverse year-round Community Center programming at no cost to the City. Daily use or admission fees ranging from $10 to $16 per person work against the objective of creating a public use that is affordable and attractive to a varied - 35 - population of users. In contrast, the proposed project includes a $1.50 beach facility use fee while at the same time requiring no City subsidy and providing the state required net revenue flow, In summary, although the existing improvements could be converted to a public facility / such conversion would not achieve the State's major financial objective and, it could be argued, does not provide a maximized public access use in terms of unique recreational/educational opportunities. and support for the maintenance and operation of the most heavily utilized public beach in the state of California. STAFF RECOMMENDATIONS To approve this project, the City Council introduction for first reading an Ordinance adopting the DA, certify the EIR, adopt a finding of overriding considerations for potentially unmitigated significant adverse impacts / and approve the resolutions directing the City Manager to negotiate and execute the Concession Agreement and Ground Lease Agreement and DDA consistent with the documents attached to this staff report. CEQA Recommendations 1, The Planning commission and City Staff recommend that the city Council certify the Final Environmental Impact Report as complying with the California Environmental Quality Act (CEQA) and the City's Guidelines for Implementation of CEQA and as adequately analyzing the recommended project. 2. The Planning Commission and City staff recommend that the city Council adopt a statement of overriding considerations for the potentially unmitigated traffic impacts and a general statement of overriding considerations in the event any subsequent adverse environmental effects identified in the Final EIR are not considered substantially mitigated under the requirements of CEQA (Attachment 7). - 36 - Development Agreement Recommendations and Findings The Planning Commission and City staff recommend that the City Council introduction for first reading of an Ordinance (Attachment 8) adopting the Development Agreement as contained in Attachment 2. concession Agreement , Ground Lease Recommendation staff recommends that the City Council approve the attached resolution (Attachment 9) authorizing the City Manager to negotiate and execute the Concession Agreement and Ground Lease Agreement and any exhibits thereto between the City of Santa Monica and the Santa Monica Beach Development Limited Partnership consistent with the document contained in Attachment 3, Disposition and Development Agreement staff recommends that the City Council approve the attached resolution (Attachment 10) authorizing the City Manager to negotiate and execute the Disposition and Development Agreement (DDA) between the City of Santa Monica and the Santa Monica Beach Development Partnership consistent with the document contained in Attachment 4. Tri Party Agreement Staff recommends that the Council approve the attached resolution (Attachment 11) authorizing the city Manager to execute the agreement of the state of California attached as Attachment 5. Prepared by: Lynne Barrette, Assistant City Manager Paul Berlant, Director of Planning Mary Strobel, Deputy City Attorney Suzanne Frick, Principal Planner Liz Casey, Associate Planner wjsscc 07/02/90 Attachments: 1. 2. 3 , Planning Commission staff Report (May 23, 1990) Development Agreement Concession Agreement and Ground Lease - 37 - 4. Disposition and Development Agreement 5. Tri-Party Agreement 6. Planning Co~~ission Information Item (May 30, 1990) 7. Resolution Certifying Final Environmental Im- pact Report with statement of Overriding Considerations 8. Ordinance Adopting the Development Agreement 9. Resolution Adopting the Concession Agreement and Ground Lease 10. Resolution Adopting the Disposition and Development Agreement 11. Resolution Adopting the Tri-Party Agreement 12. Mitigation Monitoring Plan - 38 - . \ If ~ ~ -/'t1 j.,... <L M A ~~,~:_:_ _B~c~~::~~:::,"c~o_::~.~~ E R J U ( ~-;:l' ....CSe:=-H ""ANNIS. ::ANIE:i.. ~ :::!.A.~Ei,ki"'::::..v 1166' SA' \/ C=:NTE 60L.;L=:VARD. SU'TECIO 476-7.3 . I'JA~-::: ~E"NI::q." LOS A-"':CELES, CALlFOR"lIA 90049 TE_;:CO~-~i! JE.F=-~::::Y _' HAL-o;-t:N :;,=- COL.;"SE:.. I).\)G 2'''-r\<.lmT EO--..".AQD J ....O~C.N TZ -,IJ. P-PC"'E.S5.0'A~ ::::O=;I=C~A--O"" July 18, 1990 C/-J Y r:::- '7: . --; '-. - ....-- . . r-' crTY );..~& -~. ~". ~.: -,~ f r ~ ~" city of Santa Monica Plannlng Divlsion Room 212 1685 Main street Santa Monica, CA 90401 .~o JUL 19 P 4 :38 Attention: Liz Casey Re: Public Hearing - July 17, 1990 Proposed Santa Monlca Beach Hotel Ladles and Gentlemen: I am a resldent of Pacific Palisades, and a former resident of Santa Monica Clty. The purpose of my letter is to register my obJection to the proposed Santa Monica Beach Hotel and Community Center at 415 Pacific Coast Hlghway, The reason for my obJectlons are as follows: 1. An lntolerable increase of traffic on Paclfic Coast Highway and burden upon the surroundlng areas; 2. Increased trafflC hazards at or about the development; 3. The adverse lmpact of increased use of the beach on the beach itself and surrounding areas. While I realize that Santa Monica clty lost the expected revenues from the airport converSlon, it does not ]ustlfy the creatlon of a burden on the coastal and surroundlng area at Paclflc Coas"C. Highway and Chautauqua, Without the hotel, it is nearly impossible to traverse PaclflC Coast Highway between Chautauqua and the Santa Monlca Freeway during the summer weekends, Trafflc from Chautauqua to Paclfic Coast Highway backs up almost to Corona Del Mar between the hours of 11:00 a,m. and 5:00 p.m, Chautauqua is one of two streets by WhlCh residents of the Palisades are able to travel to the greater Los Angeles area. The EIR report clearly indicates a dramatic increase in trafflC by reason of the hotel and communlty center. /lop I~ j-<:- / /.,... .B IUS 1 lQ90 JUL 31_ J9~ ... \ city of Santa Monica Page three July 18, 1990 Re: Proposed Santa Monica Beach Hotel Surely there must be, among the collective minds of the City council, some ingenuity left to come up with a better use for the land, and alternative ways to generate revenue, without further desecrating our dwindling natural resources and creating additional burdens upon the citizenry, Very truly yours, MANNIS, BARBAKOW & LERNER ----- / / -' I :i", -' I ;/' i . .' {ll;ji~ MARl LEikE~' ' " "~ --- MLJ cp ~~G/ itUf ~ Cb {L~ OIL-T I ~ - , :=J U~ TMAt-V fkkl *' r-c ~uG (} i 1990 PROPOSED BEACH HOTEL (Remarks delivered to Santa Honica City Council on July 31, 1990) Two weeks ago, I listened to passionate arguments for and against the construction of a hotel on the beach. Afterwards, I was drawn to an almost inescapable conclusion: everyone was right. It didnlt matter whether they were for or against - everyone was right. So, what do we do? Our ~eaches ~elong to everyone. It would be great if there were no hotels there - or houses or anything except sand. And, it would be great if there was no litter and, therefore, no need to maintain those beaches. But, there is litter and it costs money to keep the beaches clean. ~el'a..tJ P~~~Uld be great if there were no homeless people at all - or, at least, no homeless people here. Better they should spend their winters in Kiami and their summers in Boston. The problem is, we canlt prevent them from coming here - and, we canlt afford to take care of them, once they are here. We have to deal with the problem. Koney helps. What 11m getting at is that we all desire a perfect world but we live in an imperfect one. What Ilm getting at is that we all learn, eventually, that life is a compromise. What we have to do, as rational human beings, is to learn how to compromise in such a way as to preserve as much of our ideals as possible. We have to compromise in order to live in this world - and, to govern ourselves for our own good and for the good of everyone else. How do we do that? /),IJ -b r-c AUG Pi 1990 We make laws and we elect dedicated people to represent us - to protect us. In the best of all possible worlds, no one wants for anything and pure Athenian democracy is the norm. But, that's not the real world, folks. Good government costs money, lots of it, and pristine beaches don't exist any more. Neither does unlimited access. Not for people who reside in Santa Honica and not for millions of others, like me, who live in Los Angeles or anywhere else. Everyone's entitled, in this best of all possible worlds, to go to the beach. santa xonica's problem is that Santa Honica has to pay for the privilege of playing host to uninvited guests at a party it didn't throw. so, how does Santa xonica do that? By compromise, that's bow. Santa Konica can't run on empty. Kore income is needed so that the city can survive now and in the future. Several years ago, the Council, faced with a need to raise more revenue, made a decision to accept Kicbael McCarty's hotel proposal. There were other submissions, but, of all of them, Kichael's was the one that made the most sense. It addressed the needs of this community in a way that none of the others did. It was the best deal that your city Council could get, anywhere. It provides access to a clean beach, increased parking, cultural amenities and considerable revenue to the city. That's why the council accepted Xichael's plan. It was, and is, a terrific compromise for the people of Santa Konica. This City Council is a good city council. It represents its electorate better than most because it is responsive to that electorate. It is also ~esponsible to that electorate. If there was a better way to make better use of the Sand and Sea property, your council would have jumped allover it. There wasn't and it hasnlt. Welre living in the 20th century and, like it or not, weill be dragged all the way into it, despite our kicking and screaming. You can reject MichaeliS plan and you can boot the Sand and Sea Club out. Then, youlll have an empty beach for everyone - for a while. Increased taxes will pay the bills - for a while. And then therelll be another city council and another angry group of citizens trying to find a way of dealing with the need to build, on this very same site, a new luxury hiqh-rise 1,000 room beach botel that charges $1,000 a night, so that Santa Monica can afford to stay in business - for a while. And, you know what everyone will say then? "We should have compromised1 we should have gone with Michael when we had the chance.1I . ,t'iV,i.D ADD r. P-c:. AUG 1 10nn CA:RMM City Council Meeting 8-1-90 santa Monica, California SUPPLEMENTAL STAFF REPORT TO: Mayor and City council FROM: city Attorney SUBJECT: Election Language for Development Agreement At its meeting on July 31, 1990, the City Council directed the city Attorney to prepare language to allow the voters to approve or disapprove the development of 415 Pacific Coast Highway as provided for in a Development Agreement between the City and Pacific Beach Development Limited partnership ("Developer"). In making this direction, the city Council indicated that it desired to make this vote determinative, avoiding application of other initiatives on the ballot to the project, and that it desired to require an affirmative vote in order to permit the development to proceed. Today, at 1: 30 a.m., the City Attorney distributed to the city Council language to accomplish this objective. This Staff Report transmits to the City Council revised language made during the light of day that improves the earlier language, 1 r~ VI;." A-IJD fa ; - <:.- AUG 1 ,qQO . DEVELOPMENT AGREEMENT LANGUAGE The following language should be included in the Development Agreement: 45. Voter Approval. This Development Agreement shall become effective, and the rights and obligations of the Developer shall fully and automatically vest, no later than thirty (30) days after the Adoption Date pursuant to California Election Code section 4050. As provided in Section 12 above, development of the Property and the Project shall not be governed by any Subsequent Code Changes, including initiatives commonly known as the IISave Our Beach" initiative and "Santa Monicans for a Livable Environment II initiative which may be adopted by the Cityts electorate after the Adoption Date. The city council shall place before the voters at the November 6, 1990, Regular Municipal Election a measure pursuant to Elections Code Section 4017. The measure shall provide: The people of the City of Santa Monica do ordain as follows: SECTION 1. The City Council of the City of Santa Monica by ordinance has approved a development agreement between the City and the Pacific Beach Development Limited Partnership for the development of a hotel and community center at 415 Pacific Coast Highway. The City council and Pacific Beach Development Limited Partnership do not desire to proceed with the development pursuant to the Development Agreement unless the people of the City of Santa Monica approve the development by majority vote, Accordingly, this ordinance is submitted to the people pursuant to Elections Code section 4017. SECTION 2. The development of a hotel and community center at 415 Pacific Coast Highway as provided for in the Development Agreement between the City of Santa Monica and the Pacific Beach Development Limited Partnership is approved by the people of the city of Santa Monica. The ballot title for the measure shall read as follows: 2 ... .. "-.. Shall the development of a hotel and community center at 415 Pacific Coast Highway as provided for in a Development Agreement between the City of Santa Monica and the Pacific Beach Development Limited Partnership be approved by the people of the city of Santa Monica? If the measure is not approved by a majority vote at the November 6, 1990, Regular Municipal Election, this Development Agreement shall be deemed terminated and of no further force or effect and the ordinance approving this Development Agreement shall be deemed repealed. 3 .. " .. T CONTRACT DOCUMENTS The following language should be added to the Disposition and Development Agreement as Article X, section 10.28: section 10.28. Termination in the Event Develooment Aareement is Reoealed. In the event the Development Agreement is repealed and of no further force or effect pursuant to section 45 thereof, this Disposition and Development Agreement shall be deemed terminated and of no further force or effect. The following language should be added to the Concession and Lease Agreement as Article 37, section 37.21: section 37.21, Termination in the Event Develooment Aareement is Repealed. In the event the Development Agreement is repealed and of no further force or effect pursuant to section 45 thereof, this Concession and Lease Agreement shall be deemed terminated and of no further force or effect, 4